Merchandise trade deficit widens to highest since 2013

NEW DELHI: While India’s merchandise exports for the whole of fiscal 2017-18 have recorded a healthy 9.78 per cent growth rate to end the year at $302.84 billion, data for the month of March shows that exports have recorded their first monthly decline since October last year.

While March’s decline was marginal, exports falling just 0.66 per cent to 29.11 billion, exporters feel that the trend could continue as global trade war fears remain unabated. During March 2018, imports also rose by 7.15 per cent to $42.8 billion, leaving a trade deficit of $13.69 billion.

“Exports during March 2018 were valued at $29.11 billion as compared to $29.30 billion during March 2017, exhibiting a negative growth of 0.66 per cent. In Rupee terms, exports were valued at Rs 1,89,271.16 crore as compared to Rs 1,93,028.91 crore during March 2017, registering a fall of 1.95 per cent,” said Commerce Ministry.

According to officials, the decline in March has been primarily due to a contraction in certain high-value segments like petroleum products and gems and jewellery. What worries exporters though is the widening trade deficit, especially since imports are on a steady rise.

For the whole year, while exports stood at $302.84 billion, imports grew by 19.59 per cent to $459.67 billion and the trade deficit widened to $156.83 billion —the highest since 2012-13, when it was at $190.30 billion.

The Federation of Indian Export Organisations expressed its concern at the trend, stating that it is worried about slow export growth in labour-intensive sectors such as gems and jewellery, textiles, jute and agri products. These sectors, it pointed out, are facing the problem of liquidity as banks and lending agencies are tightening norms, which does not augur well for exports for the new fiscal.

Meanwhile, services trade continued to record steady growth in both exports and imports during 2017-18.