India’s exports, which dipped 16 per cent in 2015-16, are unlikely to see an uptick in the near future due to the delayed turnaround in the global economy, according to a DBS report. According to the global financial services firm, weak global demand weighed on India’s exports, with falling commodity receipts and the strengthening of the real rupee value playing their part.
“Looking ahead, India’s exports are unlikely to improve in a hurry due to its close correlation with global imports,” DBS said in a research note. Incidentally, the World Bank and the IMF have downgraded their global growth outlook, with most of India’s key trading partners facing sluggish growth at home.
“More measures to support the trade sector are on the cards. Though they might provide short-term relief to the external sector, they are no panacea,” the DBS report added.
Data released on Monday showed that India’s trade deficit narrowed to over a five-year low of $5.07 billion in March, with imports declining sharply by 21.6 per cent year-on-year as against a decline of 5.5 per cent of exports. Imports of oil and gold — the two highest constituents of India’s import bill – registered a sharp decline in March, falling by 35.30 per cent and 80.5 per cent, respectively.
Exports declined for the sixteenth straight month in March to $22.72 billion, while imports fell to $27.79 billion during the month. The country imported gold worth $972.96 million in March as against $4.98 billion in the same period a year ago.
Oil imports during April-March 2015-16 were valued at $82.67 billion, 40.2 per cent lower than the same period last year. Non-oil imports too dipped by 17.92 per cent to $22.98 billion in March.
For the financial year 2015-16, India’s trade deficit stood at $118.5 billion, compared with $137.7 billion in the previous financial year. Exports for the financial year ended March stood at $261.1 billion, down 15.9 per cent from last year, while imports declined 15.3 per cent to $379.6 billion, data released by Ministry of Commerce and Industry showed.
“The trend of falling exports is in tandem with other major world economies. The growth in exports have fallen for the US (10.81 per cent), European Union (7.40 per cent), China (11.37 per cent) and Japan (12.85 per cent) for January 2016 over the corresponding period previous year as per WTO statistics,” the ministry said. Overseas shipments of petroleum products shrank 21.43 per cent to $2.07 billion in March, while that of engineering goods declined by 11.29 per cent to $5.34 billion. Imports of electronic goods increased by 19 per cent in March, while silver imports declined 62.42 per cent.