Exports fall for 13th straight month, down 15% in Dec

Non-oil, non-gold imports stage smart recovery, implying gradual industrial revival

Merchandise exports fell for the 13th consecutive month in December, the longest decline surpassing the nine-month contraction in the global financial crisis of 2008-09, as prices of oil and other commodities faced a global slump. The decline was, however, much less than 24 per cent witnessed in November, giving comfort on the industrial growth front.

Exports fell to $22.29 billion against $26.15 billion in December 2014, according to data released by the commerce ministry on Monday. The last recorded growth in exports was a year ago, when it rose 7.3 per cent year-on-year. Non-oil, non-gold imports fell only two per cent in December, against 20 per cent in the previous month, indicating that industrial production would recover from contraction. The index of industrial production contracted 3.2 per cent in November, for the first time in 13 months, against a five-year high of 9.8 per cent in October.

Non-oil, non-gold imports declined 8.5 per cent in October.

Richa Gupta, senior director, Deloitte India, said, “Non-oil ex-gold imports picked up pace sequentially, giving credence to the fact that at least urban demand was on the upswing.” Cumulative exports in the months leading up to December in the current financial year was $196 billion, 18 per cent less than $239 billion, the corresponding figure for the same period a year ago. This means, exports need to be $100 billion in the next three months to be at $300 billion in 2015-16.

If exports fall in the current financial year, it would be a contraction for the second year on the trot. The government, under pressure from industry and experts over the sustained fall, maintained that the decline was “in tandem with other major world economies”. Export sectors, including jute manufacturing, floor covering, have shown an impressive growth of 135 per cent, followed by spices at 34 per cent, handicrafts (exclusive handmade carpet) at 27 per cent, tea at 25 per cent, and fruits and vegetables at 24 per cent.

Imports, too, declined 3.88 per cent to $33.96 billion in December 2015 compared to the year-ago period, when it was $35 billion. During April-December 2015, India’s cumulative imports were $295 billion. This is a 15.87 per cent drop from $351 billion, the cumulative figure for the same period last year.

However, gold imports, have jumped by 179 per cent to $3.8 billion — up from $1.36 billion in December 2014. Consequently, trade deficit rose to $11.7 billion in December compared to $9.8 billion in the previous month. Cumulatively, the deficit was down to $99.2 billion for the first nine months of FY16 against $111.7 billion in the year-ago period.