press club of india, Indian Tehalka News
India’s exports fell for the twelfth consecutive month in November, virtually shrinking by a quarter from a year earlier to $20 billion, leading exporters to seek an intervention from the government as they believe the situation is now worse than what they faced at the peak of the global financial crisis in 2008-09.
Imports also contracted by a sharp 30 per cent in November, led by a 63 per cent decline in fertiliser imports, and a 45 per cent dip in oil imports. Pulses, electronics and fruits and vegetables were the only commodities to see an increase in imports.
The trade deficit for November 2015 was just $9.7 billion, compared with $16.2 billion in November 2014 and experts said the country was unlikely to face pressure on the current account deficit even if there were some foreign capital outflows in response to an anticipated interest rate hike by the U.S. Federal Reserve.
Just seven out of India’s top thirty export goods, including carpets, jute products and tea registered an increase in November, compared to nine goods in October.
“Looking at the current trend we expect to end the year with exports of somewhere in between $260-270 billion,” said S. C. Ralhan, President of India’s apex body for exporters FIEO. Exports in 2014-15 were around $310 billion.
Crisil Research said that imports would rise as domestic demand and investments pick up and commodity prices stabilise, but said exports, likely to remain weak, are a greater source of worry.
“The share of India’s trade (exports plus imports) to its gross domestic product (GDP) — referred to as ‘trade openness’ in economic parlance — has fallen drastically from 55.6 per cent at peak in fiscal 2013 to 46 per cent in the second quarter of the current fiscal,” the rating firm noted, adding that a fall of such magnitude hasn’t been since India’s economic liberalisation in 1991.
“This is another reminder of the sluggish demand conditions across the globe. As such, Indian data followed regional trends as Asian export powerhouses also registered contraction in exports,” said Richa Gupta, senior director at Deloitte India.
From: The Hindu