New Delhi: India’s merchandise exports grew for the fifth month in a row in January, though at a slower pace than in the previous month signalling a consistent improvement in external demand conditions.
Data released by commerce ministry showed merchandise exports grew 4.32% in January while imports grew 10.7%, leaving behind a trade deficit of $9.8 billion, lowest in four months.
During the month exports of chemicals (4.8%), engineering goods (11.9%), readymade garments (2.1%), petroleum products (29%) while gems and jewellery (-4.5%) and pharmaceuticals (-11.6%) exports contracted.
Imports of coal (47.3%), petroleum (61.1%), pearls, precious stones (1%), machinery (1.6%), electronic goods (24.6%) and transport equipment (4.6%) increased in January while imports of iron and steel (-18.1%) and gold (-30%) shrank.
Aditi Nayar, principal economist at ICRA Ltd, said growth of merchandise exports in January received a boost from the near-doubling of crude oil prices relative to January 2016. “The pace of growth of non-oil non-gold imports remained largely steady at 4.2% in January, in line with the 4.4% rise in the previous month, driven in particular by large coal imports," she added.
Nayar said the current account deficit is expected to rise sharply to $11-12 billion or 2% of GDP (gross domestic product) in the third quarter (October-December) of 2016-17 from $3.4 billion in the previous quarter, led by higher gold imports and crude oil prices.