January exports down 13.6%; gold imports gallop by 85%

India’s exports contracted 13.6 per cent in January — for the 14th month in a row — to $21 billion due to a steep fall in shipment of petroleum products and engineering goods amid tepid global demand. Imports too shrank 11 per cent to USD 28.71 billion last month, leaving a trade deficit of USD 7.63 billion as against USD 7.87 billion in the same month last year. It is the lowest deficit in 11 months. In February last year, it was USD 6.85 billion.

The deficit would have been lower if gold imports hadn’t shot up 85.16 per cent last month to USD 2.91 billion. Overseas shipments of petroleum products shrank 35.18 per cent to USD 1.95 billion in January, while that of engineering goods declined by 27.6 per cent to 4.98 million.

For the first 10 months of the current fiscal, cumulative exports declined by 17.65 per cent to USD 217.67 billion, as against USD 264.32 billion in April-January period of 2014-15. As per the data released by the Commerce Ministry, imports dipped by 15.46 per cent to USD 324.52 billion for the 10 months, leaving a trade deficit of USD 106.8 billion. The trade gap was USD 119.55 billion in April-January 2014-15.

Oil imports last month were valued at USD 5.02 billion — 39.01 per cent lower than the same month last year. Non-oil imports too dipped by 1.4 per cent to USD 23.68 billion. 

Meanwhile, driven by the dip in global prices, India’s gold imports increased by 85.16 per cent to $2.91 billion last month. In January last year, gold imports were worth $1.57 billion, according to Commerce Ministry data.

In December 2015, the imports of the metal had more than doubled, year-on-year, to USD 3.80 billion. The prices have been declining at global as well as domestic markets. However, the higher import impacts the country’s current account deficit (CAD).

India is the largest importer of gold in the world, the demand of which mostly comes from the jewellery industry. During the April-January period of the current fiscal, gold imports have increased to USD 29.36 billion as against USD 27.42 billion in the first 10 months of 2014-15.

For the entire 2014-15 fiscal, gold was the third-largest commodity imported to India after crude oil and electronic items. Gold imports stood at USD 34.32 billion last fiscal. In terms of volume, India -- the world’s second-biggest gold consumer -- had imported around 900 tonnes in 2014.

Gold prices in the international market have fallen to a five-year low. India imported 850 tonnes of gold during January-September period of 2015, as against 650 tonnes in the year-ago period.

In the July-September quarter of the current fiscal, CAD rose to USD 8.2 billion or 1.6 per cent of the GDP, from 1.2 per cent or USD 6.1 billion in the April-June quarter.