NEW DELHI: Exports shrank due to slowdown in global demand and were largely led by a drop of 57% in petroleum products, 85.5% in iron ore, 11.65% engineering and 12.84% gems & jewellery.
India’s export continued to tumble for eleventh consecutive month in October to $21.25 billion, a 17.53% fall from a month before, even as its imports slipped 21.15% in the same month to $31.12 billion, narrowing the trade gap to $9.76 billion, bringing it sub-$10 billion for the first time in 2015-16.
Exports shrank due to slowdown in global demand and was largely led by a drop of 57% in petroleum products, 85.5% in iron ore, 11.65% engineering and 12.84% gems & jewellery.
Imports were down to a large extent due to gold imports falling a sharp 59.5% to $1.70 billion.
Commenting on the trade data, Aditi Nayar, senior economist, Icra, said she saw a “sliver of relief” in lower de-growth in non-oil merchandise exports and a rise in the number of such commodities that reported positive growth last month.
Nayar said she was disappointed by the slide in growth of services exports in September after the double-digit growth in August.
She felt a huge drop in the gold imports that had led to recording the first sub-$10 billion merchandise trade deficit in the current fiscal was heartening “October 2015 marks the first instance of a sub-$10 billion merchandise trade deficit in 2015-16, benefiting from the decline in gold imports to the lowest level in the current fiscal year. Two-thirds of the compression in the trade deficit between October 2014 and October 2015 can be attributed to lower gold imports,” said the Icra economist.
As per Icra’s guidance, the current account deficit would narrow modestly to $8.5-9 billion in second quarter of the current fiscal from $10 billion in the same quarter last fiscal, with much of the savings on the oil account lost to lower non-oil exports and higher gold imports.
Richa Gupta, senior director, Deloitte India, attributed last month’s double-digit decline in exports to “slowdown in the global economy and the resulting squeeze in worldwide trade”.
“This was the eleventh consecutive month of negative export growth while imports also contracted by 21.2% year on year. However, more importantly there was no recovery in the non-oil ex-gold imports, which continued to decline. On the balance, we would expect exports to remain weak and the trade deficit to remain manageable,” she said in statement issued by Deloitte.
