Exports dip 15% in December; trade deficit widens further

Contracting for the 13th month in a row, India’s merchandise exports contracted 14.75 per cent in December to $22.2 billion due to a steep fall in shipment of petroleum products and engineering goods amid tepid global demand.

Imports shrank 3.88 per cent to $33.96 billion in December on yearly basis. Gold imports shot up however pushing up the trade deficit to a 4-month high of $11.66 billion, as against $9.17 billion recorded in December 2014. The overall trade gap in August last year was $12.47 billion.

Gold imports rose to $3.80 billion last month, as against $1.36 billion in December 2014. In December 2015, shipments of petroleum products shrank 47.69 per cent to $2.36 billion, year-on-year, while that of iron ore declined by 69.54 per cent to 21.24 million.

Last month also witnessed a decline in exports of engineering products -- down 15.68 per cent at $5.82 billion. Gems and jewelery exports dipped by 7.75 per cent. As for the current fiscal, 2015-16, the cumulative exports during the April-December period declined by 18.06 per cent to $196.6 billion, as against $239.9 billion in the first 9 months of 2014-15. As per the data released by the Commerce Ministry, imports too dipped by 15.87 per cent to $295.8 billion, leaving a trade deficit of $99.2 billion. The trade gap was $111.68 billion in April-December 2014-15.

Reacting on the data, exports body FIEO said significant decline in global commodities and crude oil prices are impacting the export figures.

“Global demand also does not seem to be picking up. With only countries like US showing little signs of improvement, this does not augur well for the country’s export sector in the long-run,” Federation of Indian Export Organisations (FIEO) President S C Ralhan said in a statement. Ralhan said the government needs to take steps for the removal of inverted duty structure anomalies.

It also needs to exempt exports from service tax as well as create Export Development Fund with a corpus of 0.5 per cent to 1 per cent of total export value to contain dip in exports, he said. The Commerce Ministry trade data further showed that oil imports during December 2015 dipped by 33.19 per cent, year-on-year, to $6.65 billion. However, non-oil imports grew by 7.63 per cent to $27.3 billion. During April-December 2015-16, oil imports have declined 41.6 per cent to $68 billion and non-oil imports too dipped by 3.11 per cent to $227.7 billion.