Low demand: March exports down 21%, FY15 target missed

Expressing concerns, trade experts warned that Indian exporters urgently need to upgrade their export basket from low-end products to medium-to-high-end products for recording growth in future. Exports have been in the negative zone for four months now and in the absence of “immediate attention” exports are unlikely to revive for the next few months, experts said.

According to data released by the commerce ministry, imports during the last fiscal stood at $447.54 billion, down 0.59 per cent, against $450.21 billion in 2013-14. In March, imports fell 13.44 per cent to stand at $35.74 billion, against $41.29 billion achieved in March 2014. Trade deficit for the fiscal stood at $137.014 billion compared with $135.79 billion recorded in 2013-14.

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Amid the government aiming to double exports of both and services to $900 billion by 2020, the data showed that exports of all major commodities including engineering goods, petroleum products, gems and jewellery, drugs and pharmaceuticals and organic and inorganic chemicals, which together account for almost two-thirds of the country’s total export, registered contraction in the last quarter of 2014-15.

SC Ralhan, president, Federation of Indian Export Organisations (Fieo), said that the “continuous slowdown in demand in global markets and liquidity problem is in a major way responsible for the double-digit contraction in exports during the last quarter of the 2014-15 …. even more concerning is the fact that the decline was on a low base”.

Oil import declined by a staggering 52.68 per cent at $7.41 billion in March.

Ajay Sahai, director general, Fieo, said that the lack of growth is reflective of the low-end products being exported by the country and “despite slowdown, countries like China have been maintaining high export growth due to high-end products”.

Earlier this month, the ministry announced the much-delayed foreign trade policy (2015-2020), laying down the broad policy direction for the next five years.

While the policy ropes in states and Union territories in the process of international trade, it has done away with the existing incentive schemes and instead introduced two schemes — Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS) — for goods and services.

Gold imports jump 94% to $4.98 billion

Gold imports surged by 93.86 per cent year-on-year to $4.98 billion in March due to declining prices and easing of restrictions by the Reserve Bank of India.

Imports of the precious metal stood at $2.57 billion in the same month in 2014. In February, imports grew 48.78 per cent to $1.98 billion.
Any increase in gold imports, in turn, impacts the current account deficit.

The current account  deficit in the first half of this fiscal declined to 1.9 per cent of GDP ($18 billion) from  3.1 per cent ($27 billion) in the same period of the previous year.       ENS & PTI