New Delhi, April 18
India's exports fell 1.8 per centt in the 2012-13 fiscal year, the trade ministry said on Thursday, but they were up for the third straight month in March, offering some relief to the record current account deficit.

The current account deficit has emerged as a big weak spot in Asia's third largest economy since last year. It is expected to have hit about 5 percent of GDP in the fiscal year that ended in March, but a fall in gold and oil prices along with the uptick in exports since January should take some of the pressure off.

Exports rose 6.97% year-on-year in March to $30.84 billion, while imports fell 2.87% to $41.16 billion, driven by lower spending on oil purchases that month, the ministry said. That reduced the trade deficit in the month to $10.32 billion.

The UPA government has been worried about the impact of falling exports on the overall economy, which likely registered its weakest growth in a decade in the last fiscal year. The trade gap has put pressure on the rupee, feeding inflation.

Exports for the full fiscal year (2012-13) were US $300 billion, well below a $350 billion target but higher than expected. — Reuters

Re strengthens on trade data, share rise

The rupee strengthened on Thursday with the underlying sentiment remaining bullish on the back of growing rate cut hopes from the RBI's upcoming annual monetary policy on May 3.

Sharp gains in the domestic share market following the better-than-expected trade data also aided sentiment. The partially convertible rupee closed at 53.96/97 per dollar, stronger than its close of 54.21/22 on Wednesday. The pair moved in a range of 53.9550 to 54.24 during the session.

New Delhi, April 18
Stating that gold prices are unlikely to have seen their lowest point this year, Bank of America Merrill Lynch in its report has suggested that gold may fall another $150 per ounce to $1,200/oz before prices stabilize.

BofA-ML's target is largely driven by two variables: it sees jewellery demand increasing at levels of $1,500/oz and it expects margin pressure on the gold mining industry to increase substantially at $1,250/oz.

The investment bank said that is worth noting that most of the immediate gold price drivers prevalent in the past few years — like the massive credit growth in developed countries — have been fading. "Indeed, central banks have been easing, but much of the additional funding has been parked in excess reserves. This has contributed to making gold a somewhat less viable investment proposition," the bank added.

Given that inflationary pressures remain muted due to large output gaps in advanced nations and expectations that rising nominal rates across various maturities on the US yield curve will raise opportunity costs to hold gold, the bank sees no compelling reason to increase exposure to gold right now.

According to BofA-ML, Cyprus' announcement to sell gold reserves was a key trigger behind the recent meltdown, as it raised concerns that other peripheral nations may follow suit.

However, additional gold selling in the European periphery is highly unlikely, the bank said. "We find it hard to fully justify the sell-off. Having said that, for a firm near-term recovery in gold prices we would need to see a pick up in inflation, ECB easing, and EM reserve buying. None of these events are likely until H2 of FY13," it added. — Agencies

New Delhi, April 18
Fair trade regulator Competition Commission of India has approved a proposed buyout of US-based global computing giant Dell Inc by its founder and chief Michael Dell, saying the deal will not impact competitive landscape in Indian market.

The CCI clearance, however, comes at a time when the proposed US $24.4 billion buyout of Dell by its founder is facing rival takeover bids for the company from its largest shareholder Carl Icahn and private equity major Blackstone.

The company said last month that it has got competing offers from billionaire investor Carl Icahn and Blackstone, which could be superior to a proposed joint buyout offer from Michael Dell and private equity firm Silver Lake Group.

The proposal involves Michael Dell and Silver Lake acquiring full control of the company through certain entities and finally converting it into a privately held firm.

Any major merger and acquisition deal involving businesses in India requires a clearance from CCI. — PTI

Ludhiana, April 18
Get ready to loosen your purse strings to buy garments as the prices of garments could go up by 10 to 15 per cent due to an increase in yarn prices. A 25 per cent rise in cotton yarn prices, in a matter of five weeks, has hit the city’s garments manufacturing sector hard.

Cotton yarn rates have increased by Rs 35 per kilogram in just one month up to March 24, 2013. And, on April 1, 2013, a rise of Rs 15 per kilogram was effected by yarn producers, leading to an artificial shortage.

“The marked increase in raw material prices will definitely have an impact on the finished product. We have been left with no other option but to raise the prices of garments. After excise duty on yarns was waived we have not been able to pass on the benefit to customers as yarn prices have shot up,” said Vinod Thapar, chairman of the Knitwear Club.

“Whenever the demand in importing countries rises, apart from soaring cotton prices in the domestic market, Indian cotton yarn prices are usually hiked abnormally. And on these occasions, there is no parity existing between cotton and cotton yarn prices, which adversely affects the value added segments, including garment manufacturers, who are finding it difficult to cope with this crisis and finalize export orders,” said Vinay Kansal, a garment exporter.

Not only have yarn prices risen sharply but the power tariff has also been hiked ,which will ultimately result in high garment prices.

“We are left with no other option but to pass on the burden of higher input costs to the consumers. People have to shell out more for buying clothes,” said Dharamveer, a local garment manufacturer.

Chandigarh, April 18
Facing a cash crunch, the Haryana government is set to get a Rs 1,500 crore bonanza from the central government by way of central sales tax (CST) compensation.

With the finance ministry according in-principle approval to settling compensation claims on account of the 1% CST concession granted to Maruti Suzuki India, the stage is set for payment of about Rs 1,500 crore to the state.

“After concerted efforts, the central government has decided to rectify the calculation error regarding deduction of CST from Maruti Suzuki, paving the way for Haryana to get its legitimate claim,” Haryana Excise & Taxation Minister Kiran Choudhry said Thursday.

Officials said Haryana had allowed the concessional CST rate of 1% to Maruti Suzuki to boost industrial sector in the state. However, the finance ministry dealt a double blow by making deduction on this account.

Referring to the total CST compensation, Choudhry claimed Haryana was losing about Rs 3,000 crore per year on account of reduction of the rate of CST from 4% to 2%. She said Haryana had been pursuing the issue with New Delhi for the past two years.