Jan Ex­ports Rise 4.3%, Trade Deficit Widens to $9.8 bil­lion

Im­ports in­creased 10.7% to $31.9 bil­lion dur­ing the month

The Economic Times - - Economy: Macro, Micro & More - Our Bureau

New Delhi: Im­proved de­mand from the United States, Euro­pean Union and Ja­pan helped in­crease In­dia’s ex­ports for the fifth month in a row in Jan­uary, in­di­cat­ing that de­mon­eti­sa­tion has not hit ex­ports as much as feared.

A faster in­crease in im­ports, how­ever, widened the trade deficit. Ex­ports went up 4.3% in Jan­uary from a year ago to $22.1 bil­lion, data re­leased by the com­merce and in­dus­try min­istry on Wed­nes­day showed.

Im­ports rose 10.7% 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.

Gold im­ports de­clined al­most 30% to $2.04 bil­lion in Jan­uary.

As many as 17 out of 30 ex­port­ing sec­tors showed an in­crease in ship­ments, but labour in­ten­sive sec­tors such as leather, car­pets, and gems and jew­ellery re­ported a fall in ex­ports.

“Over­all the trade bal­ance has im­proved,” the min­istry said in a state­ment.

Global trade is ex­pected to have grown about 1.7% in 2016 from the pre- vi­ous year. “Pos­i­tive trade data sets the stage for a fur­ther buildup in In­dia’s ex­ports tak­ing ad­van­tage of pickup in the US and Europe,” said T S Bhasin, chair­man, EEPC In­dia.

Ex­ports got a boost from higher crude prices. Among non-oil mer­chan­dise ex­ports, en­gi­neer­ing goods did well while gems and jew­ellery, and drugs and phar­ma­ceu­ti­cals saw a de­cline.

Oil im­ports in Jan­uary saw a 61% spike to $8.14 bil­lion while non-oil im­ports were flat at $23.8 bil­lion.

Cit­ing in­creas­ing pro­tec­tion­ism, volatil­ity in cur­ren­cies and un­cer­tain­ties as ma­jor chal­lenges for ex­port sec­tor in 2017, SC Ral­han, pres­i­dent, Fede- Oil Meals To­bacco

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Pharma ra­tion of In­dian Ex­port Or­gan­i­sa­tions said, “Go­ing by the cur­rent trend, we are ex­pected to reach around $270 bil­lion (ex­ports) this fis­cal.”

Non-oil, non-gold im­ports rose 4.2% in Jan­uary, in line with 4.4% rise in the pre­vi­ous month, driven by coal im­ports.

Trade deficit in first ten months of 2016-17 was $86.3 bil­lion, 19.82% lower than deficit of $107.7 bil­lion a year ago.

“The in­crease in trade deficit in Jan­uary 2017 rel­a­tive to Jan­uary 2016 is chiefly at­trib­ut­able to rise in crude prices and coal im­ports, which over­shad­owed the ben­e­fit of shrink­ing im­ports of gold, iron and steel, and fer­tilis­ers,” said Aditi Na­yar, prin­ci­pal econ­o­mist, ICRA.

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