Source: The Economic Times, Jul 16, 2016
NEW DELHI: Reversing 18 months of fall, India‘s exports posted a modest growth in June, raising hopes that the worst may be over. Exports in June were $22.5 billion, 1.27 per cent more than $22.2 billion in the year ago period, while imports declined 7.33 per cent to $30.6 billion from $33.1 billion in June 2015, data released by government on Friday showed.
Trade deficit rose to $8.1billion against $6.27 billion in May. As many as 18 out of 30 exporting sectors showed growth in shipment last month with handicrafts leading the pack with a whopping 91.98 per cent increase.
“Positive exports by engineering, marine, drugs and pharma, plantation commodities, electronic goods, carpets and handicrafts sectors is very encouraging as these are high employment generating sectors as well,” said SC Ralhan, president at Federation of Indian Export Organisations (FIEO).
The body expects exports to grow at least 5 per cent from now on but cautioned that there may be some ‘Brexit’ impact. Non-petroleum exports recorded a positive growth of 3.06 per cent in June at $19.99 billion. India recorded a rise in exports even as China’s exports fell 4.8 per cent in June and imports declined 8.4 per cent.
The government has set a target of increasing India’s exports to $900 billion by 2018-19 and expanding the country’s share of global exports to more than 3 per cent. The decline in imports was partly due to a 38.5 per cent fall in gold imports to $1.2 billion last month.
Oil import during June at $7.25 billion was 16.42 per cent lower year on year due to low global prices. Non-oil import during the month at $23.43 billion was 4.11 per cent lower than the same month last year. Non-oil, non-gold imports, seen as a measure of domestic demand and strength of the economy, fell 1.15 per cent to $22.22 billion, suggesting some stability.
In the first quarter (April-June) of the fiscal, India’s exports contracted 2.1 per cent to $65.3 billion while its imports dropped 14.5 per cent to $84.5 billion, leaving a trade deficit of $19.2 billion. As for services, data released by the Reserve Bank of India showed a 4.28 per cent month-on-month growth in service exports at $13.4 billion and a 10.29 per cent rise in imports at $7.9 billion in May.
Overall, the trade deficit for goods and services combined in the first quarter was $7.9 billion, 62.01 per cent lower than $20.9 billion in the year ago period.
The data came on a day when the chief negotiators from India and the European Union met here to discuss the status of the ongoing negotiations for broadbased Bilateral Trade and Investment Agreement (BTIA). “Negotiating positions were established on a few pillars that are critical components of BTIA,” the commerce department said on Friday. “India is committed to proceed with the negotiations with a hope to conclude the FTA as early as possible.”