India’s trade deficit shrank to the lowest in 10 months in December 2018 as lower crude oil prices and falling gold demand reduced the burden on the import bill. The gap between exports and imports stood at $13.08 billion, compared with $14.20 billion in the same month last year, according to a release from the Ministry of Commerce.
India’s merchandise exports rose 0.3 per cent to $ 27.93 billion in December 2018 over a year ago. Meanwhile, merchandise imports declined 2.4 per cent to $ 41.01 billion.
Oil imports in December 2018 rose 3.16 per cent to $10.67 billion. Global Brent price had decreased 12.07 per cent in December compared with the corresponding period in 2017.
Gold imports declined 24.3 per cent to $2.56 billion in December last year against $3.39 billion in the same month of 2017.
On exports front, the petroleum products recorded an increase in exports by 13.2 per cent to $4.21 billion, followed by organic & inorganic chemicals 5.5 per cent to $ 2.01 billion, RMG of all textiles 2.8 per cent to $ 1.37 billion, electronic goods 50.8 per cent to $ 0.83 billion and plastic & linoleum 20.2 per cent to $0.75 billion. The exports also improved for rice by 1.3 per cent to US$ 0.65 billion, mica, coal & other ores, minerals including processed minerals 7.4 per cent to US$ 0.35 billion, ceramic products & glassware 43.3 per cent to $0.27 billion and oil meals 35.8 per cent to $0.19 billion in December 2018.
India’s overall exports in April-December 2018-19 are estimated at $396.73 billion, exhibiting a positive growth of 13.79 per cent over the same period last year.
Overall imports in April-December 2018-19 are estimated at $479.46 billion, exhibiting a positive growth of 14.63 per cent over the same period last year.
The oil import bill during April-December 2018 was $108.10 billion – 42.85 per cent higher than last year’s $75.67 billion. The 13.8 per cent growth in overall exports is good news for India. Falling crude prices, thanks largely to increased global production, will benefit the country.
The fall in coffee exports is not surprising, as it is in line with expectation of coffee growers as well as FAO.
In late September, the government hiked import duty on 19 items in an attempt to curb the fall in the rupee and bridge the widening current account deficit.