New Delhi: In another set of poor economic data for the second straight day, India’s export contracted steepest in two and a half years by 11.19 per cent in January as the main sectors including cotton yarn, chemicals, pharmaceuticals and gems and jewellery performed poorly.
However, trade deficit in January narrowed to 11 months low to $8.32 billion from $9.45 billion in the same month last year due to fall in oil prices.
As per the data released on Thursday, while industrial growth had slowdown in December, retail inflation moved up in January.
Exports came at $23.88 billion in January against $26.89 billion in the same month last year. Imports also dipped by 11.39 per cent in January to $32.2 billion due to fall in crude oil prices.
The oil import bill declined by 37.46 per cent to $8.24 billion in January this year.
Federation of Indian Export Organisations, president M. Rafeeque Ahmed said that the present trend is an indication that the export target of $340 billion for 2014-15 would not be achieved.
Mr Ahmed said that in the given scenario, “we would be happy, if we touch export of $325 billion in this fiscal.”
He said that while contraction in global demand and softening of crude and commodity prices have impacted exports, the domestic factors did play some role.
Cautioning on the import side, Ahmed said that while decline on account of crude prices is understandable, the negative growth in import of machinery both electrical and non-electrical, project goods and key inputs such as precious and semi-precious stone do not augur well for country’s manufacturing.
“Indian exports are hovering around $300 billion from the last four years starting from 2011-12. This suggests that far radical changes are required both in the Union Budget and the Foreign Trade Policy to support the export sector failing which the decline will be difficult to arrest in view of the emerging global scenario,” he added.
Economist at ICRA, Aditi Nayar said that the further decline in the size of the merchandise trade deficit in January 2015 is given with falling crude prices.
