March exports decline 0.66% to $29.11 bn; trade deficit widens to $13.69 bn

For full financial year, deficit stood at $156.83 bn, up from $108.50 bn in 2016-17, mainly due to rise in oil import bill

Exports fell in March due to a contraction in refinery products, gems and jewellery and textiles, but managed to cross the $300-billion target for the first time in two years in 2017-18. A decline in the growth rate for three straight months till February led to a 0.66 per cent fall in exports in March. The growth rate had slipped to 4.48 per cent in February, down from 30.5 per cent in November.

According to data released by the commerce and industry ministry on Friday, exports stood at $29.11 billion in March, taking the total tally in 2017-18 to $302.84 billion, marginally above the government’s target of $300 billion. In 2016-17, exports stood at $275.85 billion. India’s annual exports remained above the $300-billion mark till 2014-15, but declined to $262.29 billion in 2015-16 due to a global slowdown.

Imports grew 7.15 per cent in March to $42.80 billion, against 10.4 per cent growth in February. During 2017-18, imports increased 19.59 per cent to $459.67 billion.

The trade deficit came in at $13.69 billion in March, higher than $11.98 billion in February. For the full financial year, the deficit stood at $156.83 billion, up from $108.50 billion in 2016-17, mainly due to a rise in oil import bill.

Source: Ministry of Commerce & Industry

Of the 30 major product groups, 18 recorded growth in March, the same number as in February. However, a sizeable chunk of major export segments continued to see a contraction in March. These include the volatile refinery products segment, which contracted 13.22 per cent after a 27.44 per cent rise in February.

Readymade garments, the sector in which India's export competitiveness has steadily fallen over the past financial year, also continued its downward slide. In March, the sector exported $1.49 billion worth of merchandise, a 17.78 per cent fall from a year ago.

The gems and jewellery sector also witnessed a 16.57 per cent decline in shipments in March, up from the 5.14 per cent contraction seen in February. “The pace of exports of gems and jewellery would take a cue from demand as well as the availability of funding for this sector in the aftermath of the fraud reported by Punjab national Bank (PNB). Lower exports would dampen imports of gold and pearls, precious, and semi-precious stones,” said Aditi Nayar, principal economist at Icra.

Engineering goods exports, on the other hand, rose 2.62 per cent to $8.11 billion after a 1.88 per cent fall in February. Other segments that posted growth include pharmaceuticals (up 8.40 per cent) and organic and inorganic chemicals (up 31.75 per cent). 

“A dip in the volume of gold imports in March more than offset the price rise in the interim period, contributing to the 40 per cent year-on-year contraction in the value of gold imports. However, the decline was largely offset by the pick-up in crude oil imports during the month,” Nayar said.

In March, the country imported $11.10 billion worth of crude oil, a 13.92 per cent rise, compared to 32.05 per cent in the previous month. This took the cumulative import bill for 2017-18 to over $459 billion, from $384 billion in 2016-17.

Non-oil, non-gold imports, a sign of domestic industrial demand, rose 12.2 per cent in March, after a 7.28 per cent decline in February.