Exports shrink first time in 8 months; trade deficit narrows
New Delhi: After recording positive growth for seven consecutive months, exports contracted 3.67 percent in February to USD 25.68 billion, although the trade deficit showed a marked improvement mainly on account of a significant decline in gold imports.
The trade deficit in February, as per data released by the government today, narrowed to USD 8.13 billion, the lowest level in five months. It improved mainly on account of a 71.42 percent decline in gold and silver imports to USD 1.63 billion in February from USD 5.71 billion in the same month a year earlier.
Total imports fell 17.09 percent to USD 33.81 billion last month. Oil imports, too, declined 3.1 percent to USD 13.6 billion.
Apex exporters body FIEO said that due to the decline in overseas shipments, India's exports will fall short of target by about USD 15 to 18 billion. The government has estimated exports at USD 325 billion in this financial year.
"Credit is the biggest problem which exporters are facing. Arrears of duty refund claims have crossed Rs 20,000 crore. Global demand is there but we are unable to take advantage of this due to credit problem," Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed said.
After registering a 13.47 percent growth in October, exports recorded growth in single digits until January.
Sectors contributing significantly to the export basket such as petroleum, engineering and pharmaceuticals registered a decline in February.
For the April-February period, exports were up 4.79 percent to USD 282.7 billion.
Imports during the 11-month period fell 8.65 percent to USD 410.86 billion. The trade deficit during this period was USD 128 billion.
Non-oil imports in February declined 24.5 percent to USD 20.12 billion.
During April-February, non-oil imports dipped 13.4 percent to USD 259.02 billion. However, oil imports during the period rose 0.8 percent to USD 150.63 billion.
Imports of cotton (raw and waste), vegetable oil, textile yarn fabric, fertiliser, precious and semi-precious stones, iron and steel, machine tools and electronic goods fell in February.
Iron and steel and electronic goods imports contracted 26.7 percent and 14.4 percent to USD 582.93 million and USD 2.11 billion, respectively, in February.
Exports of petroleum, engineering and pharmaceuticals dipped 10.36 percent, 2.76 percent and 1.62 percent to USD 4.91 billion, USD 5.02 billion and USD 1.17 billion, respectively.
Gems and jewellery exports dipped 4.18 percent to USD 3.59 billion in February.
There was an increase in exports of marine products (63.3 percent), iron ore (31.92 percent), man-made yarn (19.57 percent) and ready-made garments (15.54 percent) last month.