Exports Slip 15.8% in FY16 on Slow Global Recovery, Low Comm Prices
New Delhi: Pulled down by slow global recovery, softening commodity prices and weak demand, the country’s exports for FY16 settled at their lowest since FY11.
Exports added up to $261.1 billion in FY16, down 15.85% from $310 billion in 2014-15. In FY11 the shipments were at $245.9 billion.
An equally sharp decline in imports meant India’s trade deficit improved from last year. Data released by the commerce and industry ministry showed that cumulative value of imports for the period April-March 2015-16 was $379.5 billion against $448.03 billion, registering a 15.28% decline and leaving a trade deficit of $118.5 billion during the year. “The trend of falling exports is in tandem with other major world economies,” the ministry said in a statement.
Full year oil imports were down 40% while non-oil imports fell 4.12%. Led by an 80.48% drop in gold imports, India’s trade deficit narrowed for the third straight month in March to $5.07 billion, the lowest in more than five years.
March imports declined 21.56% at $27.78 billion, outpacing the 5.47% fall in exports which stood at $22.71 billion. Exports have fallen for sixteen months in a row.
“The halving of the merchandise trade deficit in March 2016 with respect to March 2015 was predominantly on account of a sharp decline in gold imports following the jewellers’ post-budget strike as well as lower net oil imports led by a fall in price and volumes,” said Aditi Nayar, senior economist at ICRA.
“The one-off plunge in gold imports in March 2015 has contributed to the sharp fall in the merchandise trade deficit, disguising the continuing weakness in nonoil merchandise exports.” The weak data comes days after the WTO cut its forecast for world trade in 2016 further from 3.9% earlier to 2.8%. In September last year, it had revised the estimate for 2016 downwards to 3.9% from 4.0%. However, the WTO expects global trade growth to rise to 3.6% in 2017.
Full year oil imports were down 40% while non-oil imports fell 4.12%