Merchandise exports shrank 15.9 per cent in 2015-16 to $261.13 billion amid weak overseas demand, a slump in commodity prices and currency volatility. Reflecting a slowdown in the domestic economy, especially in the manufacturing sector, goods imports contracted 15.3 per cent to $379.6 billion.
Releasing the data on Monday, the Commerce Ministry said: “The trend of falling exports is in tandem with other major world economies.” Global trade is projected to grow 2.8 percent this year, lower than a previous forecast of 3.9 percent, the World Trade Organization said earlier this month. The WTO said risks to its latest forecasts were still mostly on the downside, including a sharper than expected slowing of China’s economy, worsening financial market volatility and exposure of countries with large foreign debts to sharp exchange rate movements. Warning of the need for the government to be alive to protectionist measures being taken by other countries, Jawaharlal Nehru University professor Biswajit Dhar said India’s exporters face difficulties in getting market access overseas. “The government needs to provide more incentives to help the sectors that have done well during the ongoing crisis period, do better,” Mr. Dhar said.
Goods exports also contracted for the sixteenth straight month in March, when it fell 5.47 per cent to $22.7 billion, while imports also fell 21.5 per cent to $27.8 billion.
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The silver lining in the trade data was the contraction in oil imports, which shrank 40.2 per cent for the full year to $82.6 billion, while non-oil imports fell 4.1 per cent in the period to $297 billion. This helped narrow the trade deficit to a five-year-low of $118.45 billion for fiscal 2015-16.
The trend of falling exports is in tandem with other major world economies.” There has also been a minor recovery on the exports front in the last four months, with the pace of contraction in goods exports slowing from April-November, when it had shrunk 18.46 per cent.