India’s exports up by 9%, imports by 26%, trade gap widens to $16.3 bn in Jan

The Dollar Business Bureau

India’s exports witnessed a growth of 9% in January this year, supported by a positive growth in the outbound shipments of petroleum, chemicals and engineering goods, even as the trade deficit shot up to a three-year high.

The trade deficit widened to $16.3 billion in January due to 26.1% growth in imports on account of increased inbound shipments of crude oil, according to the data released by the Ministry of Commerce.

The trade deficit, gap between imports over exports, had reached $16.86 billion in the month of November 2014. In January 2017, the country’s trade deficit was $9.9 billion.

“Exports during January 2018 have exhibited positive growth of 9.07% in dollar terms vis-à-vis January 2017. Exports have been on a positive trajectory since August 2016 to January 2018 with a dip of 1.1% in the month of October 2017,” the Commerce Ministry said in a statement.

“Exports during January valued at $24.38 billion as compared to $22.35 billion during January last year,” it said.

Exports of petroleum products, organic & inorganic chemicals, engineering goods, and drugs & pharmaceuticals, recorded a healthy growth of 39.5%, 33.6%, 15.77% and 8.6%, respectively.

During the period April-January 2017-18, the cumulative value of exports was $247.89 billion as compared to $221.82 billion in the same period a year ago, a growth of 11.75%.

“In January this year, imports were valued at $40.68 billion which was 26.1% higher in dollar terms over the level of imports valued at $32.26 billion in January 2017,” said the statement. 

During the ten-month period of 2018-19, cumulative value of imports was $379.05 billion as against $310.16 billion, registering a growth of 22.21%, it said.

In January, the major commodity groups registering growth in inbound shipments were pearls, precious & semi-precious stones (55.71%), petroleum, crude & products (42.64%), machinery, electrical & non-electrical (29.11%), coal, coke & briquettes, etc (31.67%), and electronic goods (12.19%).

The trade deficit for January this year was estimated at $16.29 billion as against the deficit of $9.9 billion during the same month last year. During April to January period, the trade deficit widened to $131.15 billion.

Reacting on the data, Federation of Indian Export Organisations (FIEO) expressed concern over decreasing trend in growth and declining pattern of employment intensive sectors of export.

Ganesh Kumar Gupta, President, FIEO said that though we have witnessed positive growth for third time in a row, however, the rate of growth is declining month-on-month basis.

Out of export growth of about 9% more than 6% has been contributed by petroleum products alone. More importantly, labour-intensive sectors like garments, carpets, handicrafts, man-made textiles are exhibiting negative growth primarily due to liquidity crunch emanating from blocking of funds in GST,” he said.

He also expressed concern over the increasing trade deficit, as export growth is not keeping pace with import growth. 

Gupta urged the Government to look into the refund issues seriously by undertaking a clearance drive so as to clear all cases by March 31, 2018.

“Alternatively, banks may be asked to finance exporters against the pending GST refund claims with interest to be borne by the Government,” he added.