NEW DELHI: Even as the impact of demonetisation on the economy is still unfolding, India’s foreign trade data for the month of December 2016 was upbeat.
Exports, which account for about one-fifth of India’s gross domestic product, continued to grow for the fourth month in a row, expanding by 5.72 per cent year-on-year to $23.9 billion in December 2016, compared to $22.6 billion in the year-ago period. This is the highest level since 2015.
Imports stood at $34.35 billion, slightly rising by 0.46 per cent during the month under review, leading to a sharp fall in trade deficit to $10.37 billion, down from $13 billion in November 2016.
Considering the increase in crude oil prices as a result of OPEC output cut agreement last year, oil imports increased 14.6 per cent to $7.64 billion against $6.67 billion in December 2015. Non-oil imports fell 2.98 per cent to $26.608 billion compared to $27.42 per cent reported in the year-ago period.
Gold imports slumped 48.49 per cent to $1.95 billion from $3.80 billion in December 2015. In November, gold imports spurted 23.24 per cent to $4.36 billion, which had pushed the trade deficit to a two-year high. The November spike was widely believed to be rise in gold purchases in the initial days of demonetisation.
Among other categories, iron and steel imports saw a fairly large increase of 29 per cent month-on-month to $1.2 billion while electronic goods imports increased 13 per cent to 3.99 billion. Export of engineering goods grew 19.89 per cent to $5.84 billion.
In the April-June 2016 quarter, India’s exports contracted 2.1 per cent to $65.3 billion, while imports dropped 14.5 per cent to $84.5 billion, leaving a trade deficit of $19.2 billion. However, during the April-December 2016 period, exports swelled marginally by 0.75 per cent to $198.8 billion, while imports dropped 7.42 per cent to $275.3 billion. The trade deficit during the nine-month period was $76.54 billion.