India’s exports which are in the negative zone since December 2014 will continue its slowdown for a while and are likely to start picking up from the fiscal year 2016-17, according to the Economic Survey tabled in Parliament on February 26. The survey said that the continuance of low commodity prices globally promises well for sustaining low trade and current account deficit. It further said that the trade policy has focused on promoting exports and thereby moderate the levels of trade deficit. The moderation in the levels of trade deficit had a useful effect on sustaining the moderation in the overall balance-of-payments outcome in the current fiscal.
The survey said that since the latter half of 2014, there has been a southward movement in the growth of exports from India and major countries of the world, as export growth of different countries moves in tandem with the world economic situation. India’s merchandise exports dipped for the 14th month in a row, down 13.6 percent in January to $21 billion due to fall in shipments of petroleum and engineering goods, although trade deficit showed improvement.
The survey further highlighted that the global economic outlook has remained under the cloud of uncertainty for long, with periodic financial market turmoil and heightened risk aversion. However, India's external sector outcome continues to be strong and sustainable because of strong macroeconomic fundamentals and low commodity prices. Terming the current account deficit, the survey said that it is likely to be in the low range of 1-1.5 percent.