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Snapping the double-digit growth trend of the previous four months, merchandise exports rose only 5.9 per cent in November over a year, to $24.6 billion, despite the rupee's depreciation.
These were dragged down by slower growth in refinery, pharmaceutical and gem and jewellery products. Those in the sectors also blamed a strike in some important terminals for the deceleration.
Imports, on the other hand, fell 16.4 per cent to $33.8 billion in November, the lowest since March 2011, compared with $40.5 billion in the corresponding month of 2012-13, official data showed.
This narrowed the trade deficit by 46.5 per cent to $9.2 billion in the month, against $17.2 billion in November of 2012-13. This augurs well for the government's efforts to contain the current account deficit (CAD) below $60 billion in 2013-14.
The government said it hoped exports would see a turnaround in December, since a shutdown of some petroleum refineries in November due to regular maintenance work had affected outbound shipments. Besides, international crude oil prices fell by $5-$7 a barrel in November, which took a toll on exports as well, said Commerce Secretary S R Rao while issuing the trade data here on Wednesday.
"The cost of rough diamonds significantly went up. So, traders did not buy the commodity," he added. Now, these rates had fallen and "we will come back on growth numbers".
Rao also said exports of pharmaceutical products were affected by the domestic regulations on prices of essential drugs.
"Importers worldwide are hammering down on prices of Indian drugs by stating that you (India) are selling the same drug domestically at 'X' cost, then sell us at the same rate," he explained.
The rupee depreciated 14.2 per cent in November over the same month of 2012.
Some analysts attributed the slow rise in November exports to a statistical fact. Exports in November 2012 were revised upwards to $23.25 bn from the earlier $22.3 bn. "If the November 2012 export figures were not revised, export growth would have been higher at 10.3 per cent," said State Bank of India's chief economic adviser, Soumya Kanti Ghosh.
M Rafeeque Ahmed, president of the Federation of Indian Export Organisations, blamed the low pace of export growth to a strike at the Nhava Sheva International Container Terminal (NSICT) and congestion at Gateway Terminals India (GTI). "The strike at NSICT lasted almost 12 days and the go-slow movement at the GTI in November resulted in large congestion at the JN Port Terminal in Mumbai, which affected the movement of export containers, due to shut-outs and congestion," he said. Those shipments would be added in the December export figures.
Non-oil imports had a larger impact on the contraction of overall imports. Inbound shipment of oil fell only 1.1 per cent over a year, to nearly $13 billion in November. Non-oil imports declined 23.7 per cent, to $20.9 billion, from $27.3 billion a year before. Most of this decline came from a 80.5 per cent fall in import of gold & jewellery, at $1.05 billion against $5.4 billion over the period. This was due to a deliberate policy of the government to curb these, to ensure a lower trade and current account deficit.
Cumulatively, exports rose 6.3 per cent to $204 billion over the first eight months of this financial year. The government has set a target of $325 billion of exports, against $300 billion in 2012-13.
Imports contracted 5.4 per cent to $303.9 billion in the first eight months of 2013-14, year-on-year. The trade deficit narrowed 29.7 per cent to $99.9 billion in April-November, compared with $129.2 billion in the corresponding period a year before. In 2012-13, the year's trade deficit of a little over $190 billion had yielded a CAD of $87 billion or 4.8 per cent of gross domestic product.
"The trade deficit will be within a $140-150 billion range in the current financial year, helping keep the CAD at $50-60 billion," Ahmed said.
