India’s exports, which are in the negative zone since December 2014, are expected to start picking up from the next fiscal, the Economy Survey tabled in Parliament today said.
The Survey also said that the continuance of low commodity prices globally augurs well for sustaining low trade and current account deficit.
“As such, while export slowdown may continue for a while before picking up in the next fiscal,” it said.
It said the global economic outlook has remained under the cloud of uncertainty for long, with periodic financial market turbulence and heightened risk aversion.
The recent bout of uncertainty owes to developments and concerns about China’s growth, financial markets and currency, it said, adding that the spillovers are causing shocks in vulnerable economies.
However, it added that India’s external sector outcome continues to be strong and sustainable because of strong macroeconomic fundamentals and low commodity prices.
Exports data
Exports dipped for the 14th month in a row, down 13.6 per cent in January to $21 billion due to fall in the shipment of petroleum and engineering goods, although trade deficit showed improvement.
During April-January 2015-16, exports declined 17.65 per cent to $217.67 billion against $264.32 billion in the same period previous fiscal.
“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 and export growth of different countries moves in tandem with the world economic situation,” it added.
Top exporting sectors, including engineering, petroleum products, gems and jewellery, textiles, chemicals and agriculture, were not showing healthy growth rate.
The Survey also said that the rupee remained resilient in the recent turmoil, testifying to a strong macroeconomic outlook for the country.
In 2014-15, although the rupee declined in value against the dollar by 1 per cent, it became stronger against other currencies, it said.
Current account deficit
On the current account deficit, it said CAD is likely to be in the low range of 1-1.5 per cent.
“The moderation in the levels of trade deficit had a salutary effect on sustaining the moderation in the overall balance-of-payments outcome in the current fiscal,” it added.
Imports dipped by 15.46 per cent to $324.52 billion for the 10 months of this fiscal, leaving a trade deficit of $ 106.8 billion. The trade gap was $119.55 billion in April-January 2014-15.