Exports drop 0.79% to $22.17 billion in May

The Dollar Business Bureau

India’s exports dropped for the 18th straight month in May, marginally by just 0.79 percent to $22.17 billion. The rate of decline was the lowest from November 2014.

Imports, too, contracted by 13.16 percent to $28.44 billion, thereby bringing down the country’s trade deficit to just $6.27 billion as against $10.4 billion in May last year.

India’s imports were $32.75 billion in May 2015.

“Decline in exports has largely been arrested and non-oil exports have turned positive after a long gap,” said S C Ralhan, President, FIEO.

Ralhan expressed satisfaction over India’s exports to China and said India should continue to focus on its neighbour, as this will help in bridging trade deficit which is heavily tilted towards China.

Exports have been falling since December 2014, majorly due to weak global demand and slump in oil prices. Oil prices of late have shown some indications of rebound.

The country’s total exports stood at $264.3 billion in 2015-16 compared to $317.5 billion in 2014-15.

The FIEO Chairman remained optimistic of India’s future trade potential and said India may achieve a double-digit export growth from October, which could take the total exports value to $300 billion during 2016-17.

During April-May 2016, overall exports fell by 3.74 percent to $42.73 billion, while imports plunged by 18.15 percent to $53.85 billion.

India’s exports growth in May was led by iron ore, which grew at a staggering 830.65 percent, followed by tobacco (31.29 percent), handicrafts (32.27 percent), gems & jewellery (24.34 percent) and chemicals (10.94 percent).

India's services exports, however, remained almost flat at $12.91 billion in April this year, according to the RBI data. Services exports in April last year stood at $13.01 billion.

Reacting to the deep decline in India’s exports, the Confederation of Indian Industry (CII), expressed deep concerns over India’s export performance and urged the government to come up with domestic policy reforms.

“In this challenging situation, India can no longer afford to delay domestic reforms aimed at improving export competitiveness, which would have a direct influence on its exports performance,” said Sanjay Budhia, Co-chairman, CII National Committee on International Trade and Exports.