The country’s merchandise exports fell in January, for a 14th month in a row, by 13.6 per cent to $21.1 billion against $24.4 bn a year before.
Major items such as petroleum and engineering continued to contract, due to softening prices and subdued demand, official data showed on Monday.
As compared to this, during the 2008-09 global financial meltdown, the decline was for nine months in a row. Exports had previously seen monthly growth in November 2014, rising 7.3 per cent over a year.
India is not the only market to see a sharp deceleration in export. These dropped 11.2 per cent to $177.5 bn in January in the largest trader of goods, China, year-on-year.
December’s fall in Indian exports was a little over 15 per cent.
Imports also fell in January, by 11 per cent to $28.7 bn as compared to January 2015, when it was $32.3 bn. As such, the trade deficit stood at a 11-month low of $7.6 bn in January 2016 against $11.6 bn in December 2015.
Non-oil, non-gold imports are taken as demand for industrial products and so, the data cast doubt on recovery of industrial production. Output as measured by the Index of Industrial Production contracted both in November and December, by 3.4 per cent and 1.3 per cent, respectively.
This is the last major data on the macro economy to be issued by the government before its Budget 2016-17 proposals.
The major contraction in exports were in petroleum (35.2 per cent), engineering goods (27.6) and in readymade garments (6.1). “The fall in engineering exports by over 27 per cent will have a negative impact on jobs as well, since the sector is dominated by small and medium enterprises, with large numbers of employment,” said T S Bhasin, chairman, Engineering Export Promotion Council.
Within commodities, the effect of government measures against dumping of steel through higher duties was evident from a continued decline in imports of iron & steel. These fell 16.4 per cent in January year-on-year, says a note by YES Bank
For the first 10 months of the current financial year (April-January), exports plummeted 17.65 per cent to $217.7 bn against $264.3 bn a year before.
To achieve even the revised and lower target of $300 bn, the country has to export $82 bn in the last two months of year, a formidable task. Federation of Indian Export Organisations president S C Ralhans said cumulative export might only reach $260 bn. It was a total of $310 bn in 2014-15, down 1.2 per cent over the previous year’s. So, this financial year is set to be the second year in a row to see a contraction in exports.
The country’s cumulative imports in April-January was $324 bn, a drop of 15.5 per cent from $383 bn in the corresponding period of the previous year. As a result, the trade deficit narrowed to $106 bn for April-January 2015-16, lower than the $119 bn in the same months of the previous year.