March surge sees exports hit a record high in FY19
India’s combined exports grew 8% to $535.4 billion in 2018-19
NEW DELHI: India’s merchandise exports made a surprise recovery in March by growing in double digits to touch a new high of $331 billion in 2018-19, despite growing protectionism, after four months of low single-digit growth.
Combined exports, including the merchandise and services sectors, grew 8% to cross the half a trillion dollar mark for the first time at $535.4 billion in 2018-19, according to data released by the commerce ministry.
In March, India’s merchandise exports grew 11% to $32.5 billion, while imports rose 1.4% to $43.4 billion, leading to a trade deficit of $10.9 billion. Overall trade deficit in 2018-19 rose to $176.4 billion from $162 billion a year ago.
China’s merchandise exports rose 14.2% in March, while imports fell 7.6%, as the US and China inched closer to a trade deal.
Economies across Asia, especially China and the Southeast Asian nations, have been showing signs of sluggishness with contraction in manufacturing because of the slowdown in the global trade and fragile world economy, but almost all of India’s value-added product segment of exports have shown impressive growth, said Ganesh Kumar Gupta, president of Federation of Indian Export Organisations.
Exports of Indian pharmaceuticals (13.6%), chemicals (17%), engineering goods (16.3%), cotton yarn and handloom products (2.2%), readymade garments (15.1%), and
petroleum products (6.6%) rose in March, while shipments of gems and jewellery (-0.37%) contracted.
Growth in non-oil, non-gems and jewellery imports, an indicator of the state of economic activity in the country, contracted 3.7% in February, led by transport equipment (-19.6%), electronic goods (-6.5%) and plastic (-1.9%).
Import of crude oil and gold picked up 5.6% and 31.2% respectively, while import of electronic goods, coal, chemicals, plastic materials, pearls, non-ferrous metal, machinery and transport equipments contracted, in line with a broad slowdown in domestic economic activity.
India’s factory output growth
hit a 20-month low in February.
The Reserve Bank of India (RBI) cut the policy rate by 25 basis points for the second consecutive time earlier this month as concerns over growth loomed larger than those surrounding inflation.
The International Monetary Fund last week cut India’s gross domestic product growth forecast for 2019-20 by 20 basis points to 7.3%, following similar action by the Asian Development Bank and the RBI, which last week cut their 2019-20 growth projections for India to 7.2% from 7.4% earlier, blaming rising risks to global economic growth as well as weakening domestic investment activity.
IMF also cut its global growth forecast for 2019 by 20 basis points to 3.3%, the lowest since the financial crisis in 2008, blaming trade tensions between the US and China, loss of momentum in Europe and uncertainty surrounding Brexit.
The World Trade Organization (WTO) had last month projected that trade growth to slow from 3.9% in 2018 to 3.7% in 2019, cautioning that these estimates could be revised downward if trade conditions continue to deteriorate.
“This sustained loss of momentum highlights the urgency of reducing trade tensions, which together with continued political risks and financial volatility could foreshadow a broader economic downturn,” WTO said.