Exports rises by 9.78% in 2017-18, crosses $300 bn mark after 2 years
India’s exports crossed the $300 billion mark after a gap of two years in FY18 even as shipments declined in March and higher imports pushed the trade deficit for the full year to a five-year high. Exports declined nearly one percent in March after four months of rise to $29.1 billion from $29.3 billion a year ago, data released by the Government showed.
India’s trade deficit widened to $156.8 billion in 2017-18 compared with $108.5 billion in FY17 amid rising global trade tensions. Imports were up 7.2% to $42.8 billion in March, yielding a traded deficit of $13.7 billion against $10.7 billion in March last year.
For the full FY18, exports rose 9.8% to $302.8 billion while imports were up 19.6% at $459.7 billion, a trade deficit of $156.8 billion against $108.5 billion in FY17.
“Such a huge trade deficit is a cause of worry because crude prices are set to move Northwards…we need to look at alternative sources of energy,” said Mr. Ajay Sahai, Director General, Federation of Indian Export Organisations (FIEO).
“ICRA expects the current account deficit to more than triple to US$47-50 billion (~1.9% of GDP) in FY2018 from US$15 billion in FY2017,” said Aditi Nayar, Principal Economist ICRA.
Industry has blamed sluggishness on issues relating to the Goods and Services Tax (GST) and slow process of refunds under the new tax regime. Only 18 out of 30 major product groups showed a positive growth, leading to a 0.66% decline in overall shipments in March.
“Decline in India's merchandise exports in March is a case of a "missed opportunity”, as our exports have dropped at a time when the major economies of the world, including the US are showing an uptick,” said EEPC India Chairman Ravi Sehgal.
Imports of fertilisers and crude rose a sharp 90% in March followed by an 85% rise in import of metalliferous ores and minerals. However, imports of gold declined 40% last month while those of electronic goods rose 2.5%. Total imports rose 7.15% to $42.8 billion last month.
“This is all the more important in the backdrop of more and more protectionism rearing its head. Rising raw material costs, among other factors, have had a crippling impact on the shipments,” Sehgal added.