NEW DELHI: Improved demand from the United States, European Union and Japan helped increase India’s exports for the fifth month in a row in January, indicating that demonetisation has not hit exports as much as feared.
A faster increase in imports, however, widened the trade deficit. Exports went up 4.3 per cent in January from a year ago to $22.1billion, data released by the commerce and industry ministry on Wednesday showed.
Gold imports declined almost 30 per cent to $2.04 billion in January. As many as 17 out of 30 exporting sectors showed an increase in shipments, but labour intensive sectors such as leather, carpets, and gems and jewellery reported a fall in exports.
“Overall the trade balance has improved,” the ministry said in a statement. Global trade is expected to have grown about 1.7 per cent in 2016 from the previous year.
“Positive trade data sets the stage for a further buildup in India’s exports taking advantage of pickup in the US and Europe,” said T S Bhasin, chairman, EEPC India.
Exports got a boost from higher crude prices. Among non-oil merchandise exports, engineering goods did well while gems and jewellery, and drugs and pharmaceuticals saw a decline.
Oil imports in January saw a 61 per cent spike to $8.14 billion while non-oil imports were flat at $23.8 billion. Citing increasing protectionism, volatility in currencies and uncertainties as major challenges for export sector in 2017, SC Ralhan, president, Federation of Indian Export Organisations said, “Going by the current trend, we are expected to reach around $270 billion (exports) this fiscal.”
Non-oil, non-gold imports rose 4.2 per cent in January, in line with 4.4 per cent rise in the previous month, driven by coal imports. Trade deficit in first ten months of 2016-17 was $86.3 billion, 19.82 per cent lower than deficit of $107.7 billion a year ago.
“The increase in trade deficit in January 2017 relative to January 2016 is chiefly attributable to rise in crude prices and coal imports, which overshadowed the benefit of shrinking imports of gold, iron and steel, and fertilisers,” said Aditi Nayar, principal economist, ICRA.
Source: Economictimes.indiatimes.com
