India’s exports see marginal growth in June after 18 months

The Dollar Business Bureau

India’s exports have recorded a positive growth of 1.27% in June 2016 for the first time after a gap of 18 months. The exports from the country are valued at $22.6 billion (Rs.151905 crore) during the month of June, against $22.3 billion (Rs.142342 crore) during the same month previous year, Ministry of Commerce & Industry said in a statement on Friday.

According to data provided by the ministry, the overall exports from the country have declined 2.07% during the first quarter (Q1) of FY 2017 at $65.3 billion (Rs.436961 crore) against $66.7 billion (Rs.423315 crore) in the corresponding period previous fiscal year.

The exports to the countries of USA, Japan and China have decreased 7.44%, 2.23% and 1.79% respectively in the month of April over the same month last year. Only the exports to European Union have seen a positive growth at 4.33% in April, as per the World Trade Organization (WTO) data.

Imports from India have declined 7.33% valued at $30.7 billion (Rs.206524 crore) in June 2016 over $33.1 billion (Rs.211485 crore) during same month last year. The total imports the country have come down significantly with 14.53% negative growth at $84.5 billion (Rs.565754 crore) in Q1 of FY 2017 as against $98.9 billion (Rs.627830.30 crore) during the same period a year ago.

India’s merchandise trade deficit was estimated at $19.2 billion in Q1 of FY 2017 while it was around $32.2 billion during the same quarter last fiscal. The overall trade (including services) deficit has reduced 62% at an estimated level of $8 billion during Q1 of FY 2017 when compared to $21 billion during the same quarter last fiscal.

Commenting on India’s foreign trade data, Aditi Nayar, Senior Economist, ICRA Ltd said that the widening of the merchandise trade deficit in June 2016 on a sequential basis has primarily been driven by higher oil imports, and therefore poses limited concerns.

She further said that the year-on-year decline in imports of coal, iron & steel and fertilisers is not surprising. This is mainly due to the improved production by Coal India, minimum import price and safeguard duties on domestic steel production, and substantial inventories of fertilisers.

The collapse in gold imports, continuing benefit from a lower oil import bill coupled with the nascent turnaround in exports suggest a high likelihood of a mild current account surplus in Q1 of FY 2017, even if remittances moderate further, she added.