New Delhi: The good news is that for the second instance in the last three months, imports contracted. As a result of this the trade deficit figures fell to their lowest level in the current fiscal. The effective trade deficit dropped from US$ 14.73 billion in January to US$ 9.59 billion last month. Although exports growth was relatively tepid for the fourth month in a row, falling at 2.44 percent last month. Sluggish growth was seen in major foreign exchange earners like engineering goods, jewellery and gems, and petrochemicals.
Outbound trade grew at 3.74 percent in January, while exports from the same sectors took a toll. In February, exports were US$ 26.67 billion. The performance of the country in the external sector had crashed since November, with growth reaching 0.8 percent.
Govt’s hopes of reaching US$ 350-billion trade target thwarted
The low growth rates have destroyed the government’s hope of reaching the US$ 350-billion trade target even as it contracted just once this financial year. Cumulative exports stand at US$ 298.5 billion in the first 11 months of the fiscal.
Last month, 12 of the 30 major product groups were in negative territory. Prime among them was engineering goods. Despite earning one-fourth of foreign exchange through exports, the sector grew at a marginal rate of 1.7 per cent, up from 1 per cent in the previous year.
Gems and jewellery, another vital export earning sector, continued to contract.