NEW DELHI: A lack of global demand continues to drag down India’s export performance and the passage of the Trans-Pacific Partnership could further impact the country’s exports.
November was the 12th straight month of year-over-year declines, and the trend raises fears that India’s annual exports will fall far short of the $310 billion figure recorded last fiscal year, which ended in March.
Last month marked the lowest month for exports in the past few years, as the value of India’s outbound shipments tumbled 24.4 percent from a year earlier to $20.01 billion, according to the newest provisional trade data released by the Ministry of Commerce and Industry.
“Looking at the current trend, we expect to end the year with an export figure of somewhere in between $260-270 billion,” said S.C. Ralhan, president of the Federation of Indian Export Organisations, in a written statement. “Past few days have also seen further decline in global crude oil prices, which is also expected to have further negative impact on India’s exports.”
Imports in November fell even more steeply, tumbling 30.3 percent year-over-year to $29.8 billion. As a result, India’s monthly goods deficit with the world decreased to $9.8 billion from $16.2 billion during November 2014, the published data shows.
Total exports in the first eight fiscal months through the end of November were down 18.5 percent from a year earlier to $174.3 billion. The value of inbound trade volumes during the same period reached $261.8 billion, down 17.2 percent from $316.3 billion a year earlier, helping New Delhi narrow its cumulative trade gap to $87.5 billion from $102.5 billion during April to November 2014.
“While global sluggishness will keep exports subdued, especially when there is structural weakness in trade, India’s imports would rise as domestic demand and investments pick up and commodity prices stabilize,” said CRISIL, a unit of credit evaluator Standard & Poor’s, in a press statement.
The credit rating agency said the setting up of various regional free-trade deals, especially the TPP between 12 nations, including the U.S., is weighing heavily on India’s exports.
“TPP countries account for 25 percent of India’s exports. Because of not being a part of TPP, India risks losing out a significant chunk of its export market to rivals,” CRISIL said.
The agency also said the deteriorating global competitiveness of Indian goods, particularly for gems and jewellery as well as textile products, is hurting export growth.
