New Delhi: India's exports, which are in the negative zone since December 2014, are expected to start picking up from the next fiscal, Economy Survey said on February 26. The survey, tabled in Parliament, also said that the continuance of low commodity prices globally augurs well for sustaining low trade and current account deficit.
"As such, while export slowdown may continue for a while before picking up in the next fiscal," it said.
It said the global economic outlook has remained under the cloud of uncertainty for long, with periodic financial market turbulence and heightened risk aversion. The recent bout of uncertainty owes to developments and concerns about China's growth, financial markets and currency, it said, adding that the spillovers are causing shocks in vulnerable economies.
However, it added that India's external sector outcome continues to be strong and sustainable because of strong macroeconomic fundamentals and low commodity prices. Exports dipped for the 14th month in a row, down 13.6 per cent in January to USD 21 billion due to fall in shipments of petroleum and engineering goods, although trade deficit showed improvement.
During April-January 2015-16, exports declined by 17.65 per cent to USD 217.67 billion, as against USD 264.32 billion in the same period previous fiscal.
"Since the latter half of 2014, there has been a southward movement in the growth of exports from India and major countries of the world and export growth of different countries moves in tandem with the world economic situation," it added.
The top exporting sectors including engineering, petroleum products, gems and jewellery, textiles, chemicals and agriculture were not showing healthy growth rate. It also said that the rupee remained resilient in the recent turmoil, testifying to a strong macroeconomic outlook for the country. In 2014-15, although the rupee declined in value against the dollar by 1 per cent, it became stronger against other currencies, it said.
On the current account deficit, it said CAD is likely to be in the low range of 1-1.5 per cent. Further the survey said trade policy has focused on promoting exports and thereby moderate the levels of trade deficit.
"The moderation in the levels of trade deficit had a salutary effect on sustaining the moderation in the overall balance-of-payments outcome in the current fiscal," it added.
Imports dipped by 15.46 per cent to USD 324.52 billion for the 10 months of this fiscal, leaving a trade deficit of USD 106.8 billion. The trade gap was USD 119.55 billion in April-January 2014-15.