Exports record positive growth for a fifth consecutive month

Trade deficit dips to $9.84 billion; gold imports drop 30%.

Responding to the trade data for the month of January 2017, Federation of Indian Export Organisations (FIEO) president S C Ralhan said while continuous positive growth in exports for the last five months is encouraging, the slowdown in global trade was affecting the exports equally.

Oil prices - up almost 18 per cent since the end of November - forced up the bill for crude oil, India's largest import item, by 61.1 per cent to $8.1 billion, threatening to reverse recent declines in inflation.

Imports rose 10.7 per cent to $31.9 billion during the month, yielding a $9.8 billion trade deficit in January compared with $7.6 billion in the year-ago period.

Non-oil imports in January were static, increasing by 0.01 percent to Dollars 23.82 billion, from USD 23.81 billion in the same month of past year. Export of engineering goods rose 11.89 percent to $5.45 billion, YoY.

A faster increase in imports, however, widened the trade deficit. However, it was much higher at $10.36 billion in December 2016.

However, gold imports slipped by 29.94 per cent to $2.04 billion in January 2017 from $2.91 billion in the same month a year ago as demand declined following cash crunch post demonetisation. Oil imports in January surged 61% to $8 billion while non-oil imports were marginally up by 0.01% to $23.8 billion.

The data was released by the commerce and industry ministry after trading hours, so the impact of the figures will be reflected on Thursday trading.

Exports for April-January of the current fiscal totalled $220.92 billion, up about 1 percent over the year-ago shipments.

However, this is a notch better than the global trends where exports have turned positive in 3 of the last nine months with steady growth happening only in the last two months.

On headwinds being faced by Indian exporters, he said, "Increasing protectionism, volatility in currencies and uncertainties clouding over global economy pose major challenges for export sector in 2017". Export of petroleum products increased from $2.08 billion to $ 2.69 billion, a rise of 28.96%. The net export of services for April- December, 2016-17 was estimated at $ 48.316 billion which is lower than $ 53.557 billion during April- December, 2015-16.

The rate of growth of non-oil-non-gold imports was 4.2% in January 2017, as against 4.4% in the previous month, aided by 47% increase in coal imports.

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  • Zachary Reyes