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The economy’s woes continued in March, with imports falling 2.11 per cent compared to a year ago and exports recording a 3.15 per cent drop. However, a bigger problem lay in non-oil imports, which contracted about 12 per cent year-on-year, indicating continued slowdown in industrial activity.
The slowdown story was also evident from the foreign trade data for the entire 2013-14, released here on Friday. Exports registered growth of only four per cent, while imports saw a decline of 8.11 per cent. In absolute terms, exports stood at $312.35 billion, against $300.4 billion in 2012-13. The government had set a target of $325 billion for exports. Imports stood at $450.92 billion, against $490.73 billion in 2012-13.
The trade deficit, as a result, fell 27 per cent to $138.6 billion in 2013-14 from $190 billion in 2012-13.
According to Commerce Department data, imports fell to $40.08 billion in March from $40.94 billion in the corresponding month a year ago.
Non-oil imports declined 11.8 per cent to $24.30 billion in March from $27.53 billion a year ago. A YES Bank research estimate showed gold imports stood at $2.76 billion in March, against $3.3 billion in the corresponding month a year ago. This means non-oil, non-gold imports declined 11.10 per cent to $21.54 billion from $24.23 billion in March 2013.
“We are witnessing an industrial slowdown. There is much less demand for metals and machinery, which are raw materials for our industry,” said Madan Sabnavis, chief economist of CARE Ratings. He added the outlook didn’t seem promising till the time a new government took charge after the elections and took policy decisions to spur the economy.
Crude oil imports, however, rose 17.7 per cent to $157.83 billion in March from $134.08 billion a year ago.
Exports contracted for the second consecutive month to $29.58 billion from $30.54 billion in March 2013. For March, the trade deficit stood at a five-month high of $10.50 billion, against $10.41 billion a year ago.Rafeeque Ahmed, president of the Federation of Indian Export Organisations, said exports of gems and jewellery, engineering, electronics, iron ore, silk and woollen textiles, guargum, oil meals and tea & coffee contracted, while the pharmaceuticals, petroleum, agriculture and allied sectors recorded modest growth in exports.
YES Bank chief economist Shubhada Rao attributed this to weather-related short-term disturbances in the US, as well as and India coming out of Europe’s generalised system of trade preferences (GSP) from this year. From January 1 this year, India had shifted from a few GSP items---textile, apparel, pharmaceuticals and a few chemicals and engineering items. Europe’s GSP scheme gives preference to exports from developing countries such as India, with goods sent to the European Union at lower duties.
Rao said growth in exports was expected to improve as stability returned to the rupee.
