Exports fall yet again but there is a silver-lining
India's merchandise exports declined for the 17th month in a row in April. Outbound shipments in the month fell 6.70% this year albeit at a slower pace than in March, and experts see the downward trend to continue in the current fiscal. There is a good news, though.
According to exporters' body Federation of Indian Exports Organisation (FIEO), the downfall in exports has been arrested to some extent both in March and April and it hoped that shipments move into positive territory from June onwards.
Exports of tea, coffee, gems and jewellery and pharmaceuticals recorded positive growth.
This will be music to commerce minister Nirmala Sitharaman’s ears.
Oiling the cogs
Declining oil prices in the international market has helped the country to lower its oil import bill during FY16.
The oil imports during April month this year dipped by 24.01% to $5.6 billion as compared to $7.4 billion in the year-ago period, cited the data. The non-oil imports too fell by 22.83% to $19.75 billion during the month.
Imports fall more
Imports have dropped by 23.10% to $25.4 billion in April as against $33.04 billion in the same period a year ago.
The country's trade deficit in April more than halved to $4.84 billion as compared to $11 billion in the same month last year. The trade gap was a five-year low figure. It was at $2.63 billion in December 2010.
Experts maintain that the prospect for export growth remains bleak, with global trade forecast to expand by just 2.8% in 2016 by the World Trade Organisation, Reuters reported last month.
"We expect Indian exports to continue performing poorly in 2016/17 (April-March) due to subdued global economic growth and still-depressed commodity prices," the news agency said quoting Chua Han Teng of BMI Research, a unit of rating agency Fitch, as saying.
"Additionally, the strength of the Indian rupee in real effective exchange rate terms will also have a negative impact on the country's exports," he said.
(With PTI and Reuters Inputs)