Trade deficit narrows; exports grow marginally

The country's exports grew marginally by 3.74 per cent in January due to subdued performance of key sectors including engineering, leather, and gems & jewellery, even as the trade deficit narrowed to USD 14.73 billion.

According to data from the commerce ministry, exports during the month increased to USD 26.36 billion, compared with USD 25.41 billion in January 2018. Exports growth remained almost flat in November and December 2018.

In January, engineering exports grew by only one per cent, while leather, and gems & jewellery recorded a growth of 0.33 per cent and 6.67 per cent, respectively. Petroleum exports contracted by 19 per cent.

Imports also remained almost flat at USD 41 billion during the last month. The trade deficit stood at USD 15.67 billion in January 2018. However, the deficit in January 2019 widened as compared to December 2018 when it stood at USD 13 billion.

Federation of Indian Export Organisations (FIEO), President, Ganesh Kumar Gupta said the nominal growth in exports is due to tough global condition and some constraints on the domestic front. “Global trade growth is slowing down and global economies, including China and South East Asian nations, are also facing contraction in manufacturing worsening the fragile global situation,” he sad.

He demanded immediate support including augmenting the flow of credit, higher tax deduction for research and development and better fiscal support for boosting exports.

The trade deficit widened to USD 155.93 billion during the 10 months of the current fiscal from USD 136.25 billion in April-January 2017-18.