India’s trade deficit widens in FY18

By: |
Published: April 28, 2018 3:01:46 AM

Non-oil exports grew by 2% in March 2018, the third consecutive month of sub-5% growth, as compared with the 11% average in April-December FY18.

While India's exports grew 10% y-o-y in FY18, imports grew at a faster clip—at 20%—widening the trade deficit to 2 billion.While India’s exports grew 10% y-o-y in FY18, imports grew at a faster clip—at 20%—widening the trade deficit to 2 billion.

While India’s exports grew 10% y-o-y in FY18, imports grew at a faster clip—at 20%—widening the trade deficit to $162 billion, higher than $109 billion in FY17 and the highest since FY13. The widening was due to higher oil, gold and electronic imports.

Non-oil exports grew by 2% in March 2018, the third consecutive month of sub-5% growth, as compared with the 11% average in April-December FY18. The slowdown in headline and non-oil exports was due to base-effect and some moderation in global trade. Exports of ready-made garments continued to decline in March due to GST woes and currency appreciation. Labour-intensive sectors such as ready-made garments, gems & jewellery, etc, continued to struggle and, worryingly, imports from these sectors remained strong during this period, resulting in deterioration in labour-intensive trade surplus.

Net capital goods exports remained in deficit for the 12th consecutive month, with a shortfall of $60 billion as compared with a surplus of $1.2 billion in March 2017, due to a relatively sharp expansion in capital goods imports.

Import of oil and gold slowed down in the last couple of months, but the growth of non-oil and non-gold imports remains robust. Going forward, any major acceleration in exports is unlikely, owing to moderating global trade.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition
FinancialExpress_1x1_Imp_Desktop