Merchandise exports contracted for the 12th straight month in November, dropping 24.4% from a year before, as gloomy external environment and a crash in commodity prices continue to affect the outbound shipments, showed the data released on Tuesday. Goods imports, too, shrank 30.3% in November to $29.8 billion, having dropped consistently since December 2014 as well.
Services exports, however, rose almost 10% in October from a year before (it had risen just 3% in September from a year earlier), while services imports surged 18% to $7.01 billion, according to the latest data.
Mechandise exports touched $20.01 billion in November, compared with $21.35 billion in October, as seven of the 30 major products witnessed contraction last month from a year earlier. Since imports, too, contracted sharply, the trade deficit for November came in at $9.78 billion, against $9.77 billion in the previous month, the data showed. The low price of crude oil and subdued imports of gold, coal and fertilisers in November from a year earlier helped contain trade deficit.
The government’s move to raise support to outbound shipments of more products — including textile, telecom and electronic items — under the Merchandise Exports from India Scheme (MEIS) on October 30 would take some more time to reflect in actual shipments, said analysts.
The government introduced 110 new tariff lines and increased the duty benefit rates or the country coverage, or both, for 2228 existing tariff lines in late October, as it stepped up efforts to contain the fall in exports. The ministry’s move to partially tweak the MEIS by providing more incentives to exporters came after the finance ministry had agreed to raise the allocation for the scheme to R21,000 crore for the current fiscal from R18,000 crore announced earlier.
“The shift in the festive calendar and the lower number of working days in November appear to have distorted the merchandise export shipment figures for that month, contributing to the widespread contraction across product categories. In our view, the standalone merchandise export data for November 2015 should be viewed with caution but not alarm,” said Aditi Nayar, senior economist at ICRA.