Exports Contract for 5th Month in Row

India’s exports declined 1.8% in December to $27.36 billion, on the back of currency volatility and fluctuation in commodities prices coupled with the sluggish global economy.

Exports had declined 0.34% in November.

Echoing the general economic sluggishness and weak domestic demand, imports witnessed a sharper decline of 8.83% at $38.61 billion in December.

This helped narrow down the trade deficit to $11.25 billion last month from $12.12 billion in November.

Non-oil non-gold imports, an indicator of the strength of domestic demand, contracted more steeply at 12.2%.

The decline was driven by industrial inputs such as iron and steel, coal, minerals and ores, and metals, transport equipment, electronic goods and silver.

Oil imports contracted 0.83% to $10.69 billion, while gold imports dipped 3.93% to $2.46 billion.

As for exports, it was the fifth straight month of contraction. It is in line with the slowing Indian economy that is expected to grow at a 11-year low of 5% in 2019-20.

As many as 19 of the 30 exporting sectors reported a decline in outbound shipments last month. Electronic goods, drugs & pharmaceuticals, marine products, readymade garments and cotton yarn were the major commodity groups that showed growth, the commerce and industry ministry said.

In April-December 2019-20, India’s exports shrank 1.96% on year to $239.29 billion while imports fell 8.9% to $357.39 billion, leaving a trade deficit of $118.1 billion.

The trade deficit in December 2018 was $14.49 billion.

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