Just days after finance minister Arun Jaitley ruled out the possibilities of undervaluing the currency to overcome poor export performance, the government will release the country’s trade data for February on Tuesday, which analysts expect to reflect another fall -- which will make it the 15th consecutive month of decline.
In January, exports dipped for the 14 months, down by 13.6% in January to $21 billion due to fall in shipments of petroleum and engineering goods, during April-January 2015-16, exports declined by 17.65% to $217.67 billion, as against $264.32 billion in the same period previous fiscal.
Imports also fell during January by 11% to $28.7 billion, resulting in the trade deficit narrowing to an 11-month low of $7.6 billion, leaving the trade deficit would have been lower had the gold imports not recorded an 85.16% increase in January to $2.91 billion.
“We expect February data also to reflect a decline. Trade performance of other global economies is also in the negative zone. Recent being – China. It registered 25% decline for February. The only concern now is that if the decline goes further deep then overall exports for the fiscal will slip below $260 billion, which will be a serious concern,” said Ajay Sahai DG and CEO of apex exporters body FIEO.
Releasing the January data, commerce ministry had said: “The trend of falling exports is in tandem with other major world economies. The growth in exports have fallen for USA (-10.51%), European Union (-9.48%) and China (-7.01%) for November 2015 over the corresponding period previous year as per WTO statistics.”
However, economic survey pegs that exports are expected to start picking up from the next fiscal.
The survey, tabled in Parliament, also said that the continuance of low commodity prices globally augurs well for sustaining low trade and current account deficit.
“As such, while export slowdown may continue for a while before picking up in the next fiscal,” it said.
It said the global economic outlook has remained under the cloud of uncertainty for long, with periodic financial market turbulence and heightened risk aversion.
The recent bout of uncertainty owes to developments and concerns about Chinas growth, financial markets and currency, it said, adding that the spillovers are causing shocks in vulnerable economies.
However, it added that India’s external sector outcome continues to be strong and sustainable because of strong macroeconomic fundamentals and low commodity prices.
“Since the latter half of 2014, there has been a southward movement in the growth of exports from India and major countries of the world and export growth of different countries moves in tandem with the world economic situation,” it added.
The top exporting sectors including engineering, petroleum products, gems and jewellery, textiles, chemicals and agriculture were not showing healthy growth rate. Seventeen of the 30 export sectors recorded a negative growth in January. These included major sectors such as engineering goods (-27.6% to $4.98 billion), ready-made garments (-6.1% to $1.4 billion) and petroleum products (-35.1% to $1.9 billion). Non-petroleum exports in January 2016 fell 10.55% to $19.1 billion.