Exports fall for 5th month in a row
[Editor: Exports are falling, FIIs are selling continuously (On 15-May-2015, also FIIs were net sellers of Rs.38.31 cr), Narendra Modi is taking of land acquisition for Chinese companies in Gujarat, to participate in "Make in India" campaign and Steel companies are bleeding, while Indian PM's bonhomie with the Chinese continues. What a strange coincidence? The INC should now aggressively pitch, Mr.P Chidambaram, as their PM candidate for the next Lok Sabha elections--this is the opportune moment]
NEW DELHI, May 16, 2015: India's exports shrank for the fifth month in a row, falling 14% to $22 billion in April due to a sharp decline in the value of petroleum products and gems and jewellery.
Crude oil imports too fell on account of softer international prices, resulting in a 7.5% decrease in imports to $33 billion. But, a more rapid fall in petroleum exports resulted in the trade deficit widening to nearly $11 billion, compared to $10 billion a year ago. Oil imports fell 42.6% during April to $7.4 billion, while non-oil imports rose 12.6% at $25.6 billion. Trade deficit also widened as gold imports rose over 78% to $3.1 billion.
Along with a slowdown in the industrial production, export contraction is emerging as a worry for policymakers.
Although the falling trend in oil prices has reversed in recent weeks, the dip from over $100 a barrel levels has been the main reason for the contraction in exports. In March, country's exports contracted by 21%, the steepest fall during the last six years. The last time exports registered positive growth was in last November, when a 7.3% rise was registered.
"The prime reason continues to be softening of crude, metal and commodity prices. Equally worrying is negative growth in gems & jewellery, electronics and plastic goods," Federation of Indian Export Organisations said in a statement. Top exporting sectors, including petroleum products (46.5%), gems and jewellery (10%) and man-made yarn and fabrics (8.3%%), witnessed a fall in April.
"The sequential narrowing of the trade deficit in April 2015 relative to the previous month benefitted from a moderation in gold imports. Overall, we expect gold imports of around $36 billion in the current fiscal," ratings agency ICRA said in a statement.
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