Indian exports continue to worry; down for 6th straight month

 

India's exports in the month of May 2015 stood at $22.34 billion, lower by nearly a fifth as against the same month last year.  This is also the sixth consecutive month of fall in India's exports to the world.  Imports, too, fell but at a lower pace of 16.52%.(a drop from $ 39.23 B to  32.75B for the corresponding period)

Fall in crude oil prices helped to post the lower import bill as India's oil imports for the month of May 2015 fell by nearly 41% and were valued at $8.53 billion as against $14.46 billion in May 2014. 

This indicates, India’s overseas sales are falling more steeply than many other Asian countries, dragged down both by oil prices and weak demand in developed economies other than the US, its biggest export market.  The 20% drop in May marked the longest monthly losing streak since 2009 i,e 6^th straight month.

Across Asia, the picture for exports is mixed.  Steep falls in the value of shipments from countries such as Indonesia, Australia and South Korea has been blamed on slumping commodities prices. Sluggish economies in Europe and Japan have hurt Chinese exports, which have also been hit hard by the strong yuan. 

China, too has reported a third consecutive month of exports decline. South Korea’s  May exports were down 11%, biggest slump in six years.

Weakness of exports is certainly not a pan-Asian story. Among the bright spots, Japanese exports are starting to pick up, beating expectations with an 8% increase in April. Exports from Southeast Asia to the US are also improving.

Indian exports and imports have been on the decline since the beginning of this calendar year but it is the fall in crude oil imports that is helping immensely to keep the trade deficit numbers under control. While lower oil prices benefit India because crude accounts for about 37% of imports, they also damp revenues as petroleum products account for a fifth of exports.