On Friday, as stocks across markets plunged, foreign portfolio managers and India economists with MNC banks were taken aback by a strange query from many of their offshore clients. These investors, who largely depend on external advice and research reports to buy shares, were questioning India's stunning export numbers.

When India's biggest export markets were battling fears of recession, how could Indian exports grow at a consistently scorching pace of 30% for the past eight months? They backed their argument with IMF monthly trade statistics that indicated that "other countries import from India" don't match with the commerce ministry's numbers on "exports".

Moreover, for the first time value of exports (FOB, or free on board) from India is "higher" than value of world imports (after adding cost insurance and freight). Logically, exports should be a little lower than reported import numbers at the buyers' end which include taxes and freight. According to them, in India's trade data, exports to Indonesia, Pakistan, China, South Africa, Iran reportedly grew by close to 100% in the three months prior to January 2011. But numbers from most of these countries show that growth in imports from India at sub-40% level for January and February. Also, Chinese data of imports from India show that growth is almost nil in the past eight months, with a dip in May 2011.

Wealthy foreign investors, hedge funds and institutions ask FIIs to handle their money. They also purchase participatory notes-an instrument that allows them to trade in Indian stocks-from FIIs and foreign brokerages. Besides the great consumption story that enabled India to weather the crisis in 2008, these investors have been drawn by India's robust export figures. Till now, no one ever questioned that data, even though there have been whispers among some of the local economists and sections within the Reserve Bank of India. That could now change.

Most foreign investors raising queries are worried after going through a strategy note, released a week ago, by Jefferies, a global securities and investment banking group. They are approaching India economists of various investment banks and bond houses to explain Jefferies' contention: "Right or not, export data needs inspection." Since net exports have a fair contribution to incremental growth, there are questions whether a scrutiny of the figures may also call for arevision in the GDP growth number.

ET approached three economists working for leading institutions in India and having access to the report to obtain their views on Jefferies findings. All said that even though they may differ with the report on the grounds how statistics have been handled and interpreted, the findings cannot be entirely ruled out. Nilesh Jasani and Piyush Nahar, the authors of the report, have argued that "eight months is a long enough period for these numbers to not be counted as statistical oddities" and that "there is no statistical beneficial lowbase effect in exports currently".

An MNC bank economist said selection of items in the export sample basket may generate some growth uptick on account of base effect. Also, he said the nature of the sample baskets may vary between India and the one considered by the official agency of the country where the exports have been shipped. However, he said the arguments have certain merit. For instance, Jefferies has said export acceleration is not reflected in shipment data. Also, the reports say that production statistics from industries like auto and iron & steel do not justify the high export growth in these sectors. Jasani refused to talk while Nahar could not be contacted.

Another economist said the government's intended move to scrap export subsidy may have caused frontloading in this year's data, but this cannot fully counter the points raised by Jefferies. According to some economists, India's current account deficit may be half a percentage points higher than the official number. "There may not be an obvious attempt to understate import or overstate export, but there may be gaps in data collection," said one of them. For example, he says, some imports, particularly crude oil, into SEZs is not captured in the government data. "The concern so far has been import numbers.

Questions were raised last year when the oil import bill was far lower than the rise in crude price... Now it seems, we have to take a close look at the export numbers also," said the person.