What to Export from India?
The last time the gap was lower was in February 2015 at $6.84 billion. Gold imports rose 85% to $2.91 billion last month compared with a 179% increase in December.
Oil meal exports posted the steepest decline at 77.5%, while petroleum product shipments fell 35.18%. Of the 30 export sectors, 13 registered growth amid subdued global demand and softening commodity prices. "The trend of falling exports is in tandem with other major world economies, " the ministry said in a statement.
China's exports dropped 11.2% on year to $177.5 billion in January while imports plummeted 18.8% to $114.2 billion.
In the first 10 months of the current financial year, India's exports were $217.67 billion compared with $264.32 billion in the same period last year.
"At this rate, total exports will be in the $260-265 billion range. Fall in import of capital goods and raw materials is not a good sign for industrial recovery. SMEs will not have wherewithal to retain labour and in such a case, job losses become imminent, " said Ajay Sahai, Director General of Federation of Indian Export Organisations.
"Overvaluation of the rupee, after adjusting against domestic retail inflation, is also eating into competitiveness of Indian exports. The fall in engineering exports by over 27% for January will have a negative impact on jobs as well since the sector is dominated by SMEs with large number of employment, " said Engineering Export Promotion Council of India chairman TS Bhasin.
Oil imports dropped 39% to $5.02 billion while non-oil imports declined 1.4% to $23.68 billion. Non-oil, non-gold imports, seen as a measure of domestic demand, fell 7.4% to $20.78 billion.
"The seasonal uptick in gold imports was partly advanced in the current year with the fall in prices in rupee terms during the second quarter of FY16, which led to a 19% shrinking in the value of gold imports on a year-on-year basis in the third quarter of FY16, " said Aditi Nayar, a senior economist at ICRA Ltd. "Benefiting from this, ICRA expects current account deficit to halve in the third quarter as compared to the $8.2 billion in the third quarter of FY15."