NEW DELHI: India’s merchandise exports shrank for a 12th straight month in November, falling an annual 24.43 percent, government data showed on Tuesday.
Indian exporters shipped goods worth $20.01 billion last month, lower than $21.35 billion provisionally reported in October. The trade deficit for November came in at $9.78 billion compared with a provisional $9.77 billion a month ago, the data released by the Ministry of Commerce and Industry showed. Imports fell 30.26 percent from a year earlier to $29.80 billion, the data showed.
According to a report in Crisil, the consistent decline in India’s exports has been mainly due to its focus on Asia, which accounts for almost 50 percent of the country’s total goods exports. The report said between April-October period of fiscal 2016, exports to Asia declined nearly 19 percent followed by 11.2% dip in exports to Europe.
“At a time when India’s exports are getting hampered due to subdued global demand and its own demand for natural resources (oil and other commodities) is expected to rise, a strategic engagement with Africa can go a long way in enhancing economic benefits to both sides,” the report said. With China’s growth slowing down andn its focus would shift more inwards, India can latch upon the opportunity to boost its export to the African nations.
The report suggests that India-Africa trade stood at $75 billion in 2014 against China-Africa trade which was almost three times at $222 billion. While Indian companies have invested roughly $30-35 billion in the last decade in Africa, China has invested more than $180 billion in Sub-Saharan Africa alone during the same period, the report added.
India and Africa hold promising opportunities for each other. While India can play a bigger role in Africa with capacity building, skills development, IT training programmes, the continent can help India meet its raw material requirements besides being a market for Indian products and investments, the Crisil report said.
According to Dhananjay Sinha, head, institutional research of Emkay Global Financial Services, structural decline in elasticity of emerging markets trade with respect to tepid recovery in advance economies (especially US) growth is impacting the overall global trade volumes.
“The threat of competition from cheaper China imports for domestic manufacturers remain due to its surplus capacity. The continued contraction in exports of goods and services in Q3 indicate sustenance of weak sales growth of Indian corporates,” Emkay report said.
