Shrinking trade narrows India’s FY16 trade deficit to $118.46 billion

India's merchandise trade deficit stood lower at $118.46 billion in the just concluded financial year (April-March 2015-16), compared with $137.69 billion in the previous financial year, amidst a meltdown in overall trade where both exports and imports shrank for almost 16 months in the past.

Merchandise exports from the country during March, 2016 were valued at $22.72 billion (Rs152,264.96 crore), which was 5.47 per cent lower in dollar terms and 1.45 per cent higher in rupee terms compared with exports valued at $24.03 billion (Rs150,082.80 crore) during March 2015.

While exports from the country fell for the 16th consecutive month in March, posting a 5.47 per cent year-on-year fall to $22.71 billion as global demand remained sluggish, a sharper fall in imports, especially that of gold, helped narrow the trade deficit for the month by more than half.

India's gold imports plunged 80.48 per cent to $973 million in March from $4.98 billion during the corresponding month last year amidst a nationwide strike by jewellers that affected imports.

Cumulative value of exports for the period April-March 2015-16 was $261.14 billion (Rs17,08,841.43 crore) against $310.34 billion (Rs18,96,348.40 crore) registering a negative growth of 15.85 per cent in dollar terms and 9.89 per cent fall in rupee terms over the same period last year.

The commerce ministry cites global trend of falling exports to show that the fall in India's exports is in tandem with other major world economies. Exports from the US have fallen by 10.81 per cent while European Union exports were lower by 7.40 per cent in January 2016. China, the world's largest exporter, saw an 11.37 per cent dip in January exports while Japan's exports fell 12.85 per cent in January 2016, as per WTO statistics.

Imports during March 2016 were valued at $27.79 billion (Rs186,250.88 crore), which was 21.56 per cent lower in dollar terms and 15.82 per cent lower in rupee terms over imports valued at $35.43 billion (Rs221,251.65 crore) in March 2015.

Cumulative value of imports for the period April-March 2015-16 stood at $379.60 billion (Rs24,81,367.22 crore) against $448.03 billion (Rs27,37,086.58 crore) – a negative growth of 15.28 per cent in dollar terms and a 9.34 per cent fall in rupee terms over the same period last year.

Oil imports during March 2016 were valued at $4.80 billion, which was 35.30 per cent lower than oil imports valued at $7.42 billion in the corresponding period last year. Oil imports during April-March 2015-16 were valued at $82.66 billion, which was 40.24 per cent lower than the oil imports of $138.33 billion in the corresponding period last year.

Non-oil imports during March 2016 were estimated at $22.99 billion, which was 17.92 per cent lower than non-oil imports worth $28.01 billion in March 2015. Non-oil imports during April-March 2015-16 were valued at $296.93 billion, which was 4.12 per cent lower than the level of such imports valued at $309.71 billion in April-March 2014-15.

Overall trade deficit of the country, including trade in services, for April-March 2015-16 is estimated at $53.86 billion against $68.56 billion during the same period last year, a decline of 21.44 per cent, latest data available as per RBI's press release showed.