Exports in March dip amid trade tensions

New Delhi: India’s exports dipped after a gap of four months in March but finished FY18 with a healthy rise of 9.78 per cent to $302.84 billion.

The 0.66 per cent decline during March was mainly on account of contraction in shipments of key sectors such as petroleum and gems and jewellery. 

The last time exports fell was in October 2017, when they had declined by 1.12 per cent.

Imports during the month under review rose by 7.15 per cent to $42.8 billion, leaving a trade deficit of $13.69 billion, according to data released by the Commerce Ministry on Friday.

During FY18, imports increased by 19.59 per cent to $459.67 billion and the trade deficit widened to $156.83 billion during the fiscal as compared to $108.5 billion in FY17.

The country’s merchandise exports crossed the $300 billion mark in FY18 after a gap of two financial years. The figure stood at $310.30 in FY15.

The trade deficit — the difference between exports and imports — of $156.83 billion during the fiscal is the highest since FY13, when it was at $190.30 billion.

Expressing concern, the Federation of Indian Export Organisations (FIEO) said it is worried about the export growth in labour-intensive sectors such as gems and jewellery, textiles, jute and agri products.

These sectors are facing the problem of liquidity as banks and lending agencies are tightening their norms, which does not augur well for exports for the new fiscal, it said in a statement.

“Though the global scenario reflecting forecast for global trade by WTO in 2018 at 4.4 per cent and may moderate to 4 per cent during 2019 shows encouraging scenario for global exports, however trade tensions may pose challenges for exports,” it added.

Oil imports during the month under review were valued at $11.11 billion, 13.92 per cent higher than the same month previous year. Non-oil imports grew by 4.96 per cent to $31.69 billion during the month.

During FY18, oil imports recorded a growth of 25.47 per cent to $109.11 billion. Gold imports dropped by 40 per cent to $2.49 billion in March. 

US to review duty free access of items

Washington: The US has decided to review India’s eligibility to enjoy duty free access for certain products in the US market under a tax benefit scheme.

As many as 3,500 Indian products from sectors such as chemicals and engineering get duty free access to the US market under the Generalized System of Preferences (GSP), introduced in 1976.

According to the US Trade Representative (USTR), the GSP is a trade preference programme designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.     The review can impact exports of those 3,500 Indian products to the US market as removal of duty benefits would make those items uncompetitive.

The Office of the USTR on Friday announced that it is reviewing the eligibility of India, Indonesia, and Kazakhstan in the GSP based on concerns about the countries’ compliance with the programme.

The reviews are based on the Trump administration’s new GSP country eligibility assessment process as well as GSP country eligibility petitions.

For India, the GSP country eligibility review is based on concerns related to its compliance with the GSP market access criterion, the USTR said.