Indian exports continued their downward spiral for the 15th consecutive month.
On expected lines, Indian exports continued to fall for the 15th consecutive month and were valued at Rs 1,41,515.41 crore as against exports value of Rs 1,41,738 crore in January 2016. The exports were lower by 5.66% in Dollar terms but higher by 3.77% in Rupee terms. India recorded exports worth Rs 1,36,379.94 crore during the month of February in 2015. Imports, too, dropped by 5.03% in the given month.
In January 2016, exports from Indian shores had seen a drop of 13.6% in rupee and 6.62% fall in dollar terms.
The Reserve Bank of India (RBI) also released the exports and imports figures of India for the month of January. It said that exports of services dropped to $12.57 billion in January 2016 as against $14.03 billion in December 2015. Imports, too, fell and stood at $6.8 billion in January 2015 as against $7.1 billion in December 2015.
source: tradingeconomics.com
However, the fall in Indian exports are in tandem with what has been happening in the global economy. "India’s exports have been contracting over the last 14 months, declining by 15.8%YoY (in value terms).This is the longest duration of contraction since the credit crisis, with broad-based declines in commodity and non-commodity exports," said Chetan Ahya, Upasana Chachra and Gaurav Sengupta of Morgan Stanley in a report dated March 14.
Earlier this month, China said that its exports for the month of February fell to their worst performance since 2009. The country said that its exports contracted by 25% from the same month a year ago and imports trounced by nearly 14% in the same period.
Chinese economy, too, has been suffering with growth projections now moderated to 6.5% to 7% for the current fiscal. This has made India the world's fastest growing large economy with growth projections of over 7%.
The Morgan Stanley trio said that it is likely that India's exports have contracted in volume terms, too. They said, "Non-commodity sector has suffered as well, with non-commodity exports (in value terms) on a weak trend, declining by 5.4% since Dec-14.This weaker external demand, in addition to slow growth in domestic demand, has pushed industrial capacity utilisation closer to 2009 lows."
Christine Lagarde, head of the International Monetary Fund (IMF), who was in India earlier this month, had reiterated that the country remains a bright spot in global economy and will continue to grow.
The problems for Minister of State Commerce and Industry Nirmala Sitharaman seem to grow as the Foreign Trade Policy that she had unveiled in February last year doesn't seem to be working. The ministry had targeted India's exports to reach $500 billion by 2020.
Throwing caution about India's growth prospects, Sonal Varma and Neha Saraf of Nomura in a report dated March 10 said, "A further weakening of external demand, capital outflows, a sharp rebound in commodity prices and below-normal monsoons are key downside risks to growth. In contrast, stronger global growth or a fast-tracked implementation of infrastructure/stalled projects could create upside to our growth forecast."
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