Published: Wed, May 16, 2018
People | By Leon Thompson

India's merchandise exports edged higher by over 5% in April

India's merchandise exports edged higher by over 5% in April

The trade deficit widened last fiscal to $156.8 billion, from $108.5 billion in the previous year, mainly driven by a rising oil import bill.

However, India's export growth continued to be overshadowed by the influx of imports which rose 4.60 per cent in April, albeit lower than the 7.15 per cent import rise in March.

Imports too grew by 4.60 per cent to United States dollars 39.63 billion in the month on yearly basis, leaving a trade deficit of USD 13.72 billion. "Merchandise Exports in April 2018 have exhibited a positive growth of 5.2 per cent over April 2017", Commerce Minster Suresh Prabhu said in a tweet.

"The merchandise trade deficit increased modestly... with a contraction in imports of gold and precious and semi-precious stones, and electronic goods, allaying the impact of higher crude oil prices", Aditi Nayar, Principal Economist, ICRA, wrote in a research note.

Experts have predicted that India's oil bill will continue to expand in the current financial year as external pressures such as the fallout of the Iran deal and a possible cut down in production by oil producers again heat up prices. "This is likely to push up the current account deficit to $65-70 billion or about 2.4% of GDP in FY2019".

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Gold imports too dipped by 33 per cent to United States dollars 2.58 billion in April.

He said that the overall cushion provided by the petroleum sector to exports in recent months is also not available in April as its own exports declined by 4.5 per cent.

Exports were up, primarily due to engineering and pharma goods.

"Imports during April 2018 were valued at $39.63 billion (₹2,60,084.67 crore) which was 4.6% higher in dollar terms and 6.43% higher in rupee terms over the level of imports valued at $37.88 billion (₹2,44,380.52 crore) in April 2017", the government said in a release.

Engineering, chemicals and pharmaceutical exports recorded a growth of 17.63 per cent, 38.48 per cent and 13.56 per cent respectively during the month. "Almost all the labour-intensive sectors of export including gems and jewellery, leather, jute manufacturing including floor covering, carpets, handicrafts, agri products and many other sector of exports, dominated by MSMEs are into negative territory" said Mr Gupta. However, the rate of contraction has reduced from 13.22 per cent in March and 27.44 per cent rise in February. Exports of petroleum products contracted by around 4 per cent in April.

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