India’s trade deficit narrowed to a 17-month low of $6.85 billion in February against $8.3 billion in the same month last year on account of 55% decline in oil imports. Although, deficit narrowed, exports fell for third straight month. According to official data released, extending January’s 11.12% decline exports fell 15.02% to $21.54 billion. Cumulatively, during 11-months period April 2014 to February 2015, India’s exports were $286.58 billion, significantly short of the Centre’s full-year target of $340 billion.
Disappointment on exports front was witnessed despite the 2% drop in the value of the rupee since February 1, indicating exporters’ failure in taking advantage of the increase in the currency’s competitiveness. This was mainly on account on the back of lower realizations from petroleum exports and poor performance in sectors such as engineering, pharmaceuticals and gems & jewellery.
On the flip side, overall imports fell 15.66% to $28.39 billion. Oil imports were down over 55 per cent to $6.1 billion on the back of an over 50% slide in global crude oil prices. However, gold imports rose 48% to $1.98 billion in February. Meanwhile, non-oil, non-gold imports expanded 8.7%, compared with 3.4% in the previous month, suggesting a pick-up in economic activity in February.
Lastly, expressing disappointment over the trade data for the month of February, Federation of Indian Export Organisations (FIEO) President M. Rafeeque Ahmed attributed the ‘dismal performance’ to the contraction in global demand, lowering prices of metal and commodities as well as volatility in currencies. He, however pointed that decline in February exports on low base is a factor of worry.
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