Adding new cheer to foreign trade, India’s merchandise exports grew 2.29 percent in November 2016 compared to the same period in 2015. However, high imports during November pushed up the trade deficit.
The government is upbeat that a “positive and solid difference” in 2017 exports will come over.
“I look at the new year which is going to definitely see the positive and solid difference in exports compared to the previous years when we have been really very slow. I hope newer market should emerge,” said Commerce and Industry Minister Nirmala Sitharaman.
The minister's optimism came against the backdrop of a positive growth recorded by the exports in the last three months of 2016.
In November, imports grew 10.44 percent to $33.01 billion compared to $29.89 billion in November 2015. However, during the 8-month period, the imports were $24.11 billion as against $26.33 billion over the same period last year. Overall the balance of trade has been improved, said the Commerce Ministry sources.
In November 2016, exports in value terms hit $20 billion s compared to $19.56 billion of the same month in 2015, said the data from Commerce Ministry.
Commenting on the export surge indicated by the ministry’s data, SC Ralhan, President, Federation of Indian Export Organisations (FIEO) said, “The sentiment still remains low in the global market and factors like US Fed rate hike and demonetization have also in some way added to the woes of the exporters, which may be seen in the figures of coming months.”
The growth of non-petroleum exports in November 2016 was 2.1 percent valuing $17.60 billion against $17.23 billion in the corresponding month in 2015. The total trade deficit, taking merchandise and services into account, is estimated at $28.38 billion during April- November 2016-17, a decline of 41.11 percent than the level of $48.20 billion during the corresponding period last year.
Exporters, too, expressed optimism for shipments in the new year. Federation of Indian Export Organisations (FIEO) said that out of the 30 key product groups, close to 20 are exhibiting positive trends in the past couple of months. However, the World Trade Organisation (WTO) has slashed trade growth projections for 2017 can be a matter of worry.
According to the multilateral body, global trade growth should hit 3.6 percent in 2017, but the figure is still below the average 5 per cent since 1990. The main reasons for the decline are fall in global demand and commodity prices, impacting terms of trade for exporters. The drop in crude oil prices resulted in a decline in prices as well as export realizations for petroleum products. These are major product items of exports to India.
“If such a trend continues, we can achieve $280 billion or even more in exports in the current fiscal,” FIEO President S C Ralhan said.