The Hindu Business Line : NRI remittances rise 50% in Q1, non-oil imports up 47%

BoP scorecard
NRIs showing interest in buying real estate.
Software exports up 20% in dollar terms, only 8.7% in rupee terms.
Indians match foreigners in dollar spends abroad.

Our Bureau

Mumbai, Sept 28 Non-resident Indians are sending more money ‘home’. Individual remittances from Indians working overseas have surged 50 per cent at $8.6 billion in the first quarter of 2007-08, against $5.9 billion in the year ago period, according to the Balance of Payment data released by the RBI.

Economists believe that although the US has seen a slow down in economic growth, remittances may not have been hit. Regions such as West Asia and Europe, which are the other sources for remittances into India, have shown strong growth.

“There has been an acceleration in the growth in West Asia as oil prices have been high and investments in the region have increased. Similarly, the rest of the world including Europe has shown good growth. So, NRIs want to be part of the India growth story,” said Ms Shuchita Mehta, Senior Economist-South Asia , Standard Chartered.

Real estate interest

Non-resident Indians have also been showing a distinct interest in the real estate sector.

The Chief Executive Officer of Pune-based Marvel Realtors, Mr Vishwajeet Jhavar, says, “There has been a marked increase in NRI buying, especially over the last two-and-a-half years, probably because salaries in India have begun to match those offered abroad and quite a few among them want to return home as well.”

Sensing increased NRI interest, some realtors like the Mumbai-based Garnet Constructions preferred to offload marketing rights. Garnet has struck an exclusive global marketing alliance with Dubai-based Sternon Group for its 400-acre township, along the Mumbai-Pune Highway.

Software exports

Software exports in dollar terms have grown by 20 per cent at $8.441 billion ($7.039 billion). The sharp appreciation of the rupee in the first quarter has, however, meant that software exports were higher by just 8.7 per cent in rupee terms.

Indians travelling abroad have been matching foreigners in dollar spends although in absolute terms they trail overseas visitors. But they are more than keeping pace. Travel earnings in the first quarter have grown by 22 per cent to touch $2.088 billion while outgo is growing at 26 per cent at $1.881 billion.

Growth in non-merchandise transactions (Invisibles) has helped contain the country’s current account deficit. Invisible receipts were up 27.5 per cent at $31.432 billion, against $24.643 billion. However, higher imports and a moderate growth in exports have slightly pushed up India’s current account deficit to $4.697 billion in the first quarter of the fiscal 2006-07, against a deficit of $4.567 billion in the year ago period.

The current account had registered a surplus in the fourth quarter of 2006-07 at $2.563 billion.

According to RBI data, India’s trade deficit increased to $21.6 billion in the quarter ended June 30, 2007, against $16.9 billion in the previous year.

Non-oil imports have registered a strong growth of 47.4 per cent while oil imports were higher by only 8 per cent. The Indian basket of crude oil prices remained steady at $66.3 per barrel during Q1 of 2006-07, compared to $66.8 per barrel in the previous year.

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