India’s exports surge 12.36% in Dec; trade deficit widens to $14.88 bn

The Dollar Business Bureau

India’s merchandise exports during December last year recorded a positive growth of 12.36% year-on-year, on the back of a sharper increase in the shipments of engineering goods and petroleum products.

Over the last 17 months, exports from the country have been on a positive trajectory, with a decline of just 1.1% in October 2017.

However, imports recorded a sharp increase of 21.12% to $41.91 billion during the month on the back of rise in inward shipments of gold, silver, precious stones, petroleum and electronic goods. Due to this, the trade deficit has widened to $14.88 billion in the month of December, as compared to $10.54 billion over a year ago.

Industry is hopeful that exports are expected to reach the $300 billion mark in this financial year.

Commenting on the data, Ganesh Kumar Gupta, President, FIEO said, “Exports likely to touch $300 billion mark this fiscal but rising trade deficit takes sheen away.”

“Positive growth for second month in a row, after a fall in October 2017, shows resilience of the Indian exporters. Since we have already achieved exports worth $224 billion in first nine months of the fiscal and global trade growth remains robust in 2018, we are on our course to achieve the milestone of $300 billion in 2017-18, he said.

“However, the rising trade deficit is alarming and the import profile needs to be analysed carefully to see whether imports would augment domestic production or shall pose a challenge for the same. The rising import of gold and precious and semi-precious stones can help the exports of gems and jewellery sector in next few months,” he added.

“Exports during December 2017 valued at $27.03 billion as compared to $24.06 billion during December, 2016. In rupee terms, exports were valued at Rs.173648.73 crore as compared to Rs.163344.45 crore during December, 2016, registering a rise of 6.31%, according to the data released by the Commerce Ministry.

The exports of major commodities that show a positive growth during the month are organic & inorganic chemicals with 31.36% growth, followed by engineering goods with 25.32% growth, petroleum products with 25.15% growth, drugs & pharmaceuticals (6.95%) and gems & jewellery (2.38%).

During the nine-month period of April-December, cumulative value of exports registered a positive growth of 12.05% in dollar terms. The exports during the period were $223.5 billion as against $199.5 billion over a year ago.

During December 2017, imports were valued at $41.9 billion (Rs.269242.54 crore) which was 21.12% higher in dollar terms and 14.59% higher in rupee terms over the level of imports valued at $34.6 billion (Rs.234952.15 crore) in December, 2016, according to the statement.

The major commodities of import that recorded a high growth in month of December are pearls, precious & semi-precious stones (93.98%), gold (71.52%), petroleum, crude & products (34.94%), electronic goods (19.2%), and machinery, electrical & non-electrical (11.21%). 

During April-December 2017-18, cumulative value of imports was $338.4 billion as against $277.8 billion, witnessing a positive growth of 21.76% over the same period last year.

Taking merchandise and services together, total trade deficit for April-December of the current fiscal is estimated at $70.06 billion as against the $35.6 billion during the same period in the preceding fiscal, according to the Reserve Bank of India (RBI) data.