Exports post marginal drop in May as non-oil sectors recover
The trade deficit narrowed to $6.27 billion in May, from $10.4 billion in the same month last year.
While releasing the trade data today, the Commerce Ministry said, "The decline in exports for India has slowed considerably". Exporters body FIEO said decline in exports has largely been arrested and non-oil exports have turned positive after a long gap.
"Exports are all set to take off from here onwards and we can look for double digit growth from October onwards which may pave the way for reaching $300 billion in the current fiscal," it said. CII, however, said that the uncertainty in the global economy will continue to persist and there is no sign of leap frog growth in global demand. "In this challenging situation, India can no longer afford to delay domestic reforms aimed at improving export competitiveness, which would have direct influence on its exports performance," it said in a statement.
Exports have been falling since December 2014 due to weak global demand and slide in oil prices. However, since December last year, the pace of contraction is slowing down.
During April-May 2016, exports contracted by 3.74 per cent to $42.73 billion. Imports during the period fell by 18.15 per cent to $53.85 billion, leaving a trade deficit of $11.11 billion.
Oil imports in May dipped by 30.45 per cent to $5.93 billion. Non-oil imports too fell by 7.06 per cent to $22.5 billion. In May, overseas shipments of petroleum products shrank 15.53 per cent to $2 billion. On the other hand, exports of engineering goods entered positive zone and recorded a growth of 2.2 per cent. Gems and jewellery exports too grew by 24.34 per cent to $3.71 billion.
Other sectors which recorded negative growth include carpet, textiles, oil meals, tea and coffee. Sectors which registered positive growth are handicrafts, chemicals and electronic goods.