India’s merchandise exports growth slowed to 4.48% in February from 9.06% the previous month, hit by a fall in shipments of engineering goods, ready-made garments and gems and jewellery.
However, the trade deficit narrowed to $12 billion, a five-month low, as imports growth too slowed at 10.4% compared with 26% in January. Imports of gold and transport equipment shrank last month.
Exports totalled $25.8 billion, while imports were $37.8 billion.
Exports in 18 out of 30 sectors grew. The major groups showing year-on-year expansion were petroleum products (27.44%), organic & inorganic chemicals (30.41%), drugs & pharmaceuticals (13.92%), rice (21.29%) and electronic goods (29.71%). Gold imports, meanwhile, declined 17%.
However, industry was disappointed by this meagre increase in exports. EEPC India chairman Ravi Sehgal said it was disconcerting to see Indian exports faltering when the global economy was on an uptick.
In comparison to India’s exports, China’s shipments rose a whopping 44.5% in February, the strongest in three years.
With a high 20.4% expansion in services exports outpacing the 17.1% growth in services imports, the services surplus rose to a 25-month high of $6.5 billion in January 2018.
With banks tightening the noose around the gems and jewellery sector following the Punjab National Bank scam, the industry is not very optimistic on gold imports and gems and jewellery exports.
Slow disbursement of Goods and Services Tax refunds and currency volatility could also weigh heavily on exports, experts said.
In the first 11months of this fiscal year, merchandise exports rose 11% to $273.7 billion from a year earlier, while imports rose 21% to $416.9 billion.