India: Exports decline for eight consecutive month and trade deficit widens in December
January 15, 2013
In December, exports dropped 1.9% over the same month the year before in USD terms. The contraction followed the 4.2% drop observed in November and marked the eight consecutive monthly contraction. Consequently, in the 12 months up to December, exports fell 4.3% over the same period the year before (November: -4.4% year-on-year).
Meanwhile, imports increased 6.3% in December, which came in a notch below the 6.4% rise recorded in November. As a result, the trade deficit reached USD 17.7 billion in December, which pushed the 12-month moving sum of the trade balance to a USD 198 billion shortfall. The reading exceeded both the USD 195 billion deficit observed in November and the USD 162 billion shortfall recorded in December 2011.
Amid the sluggish performance of the external sector, on December, the government announced a plan to boost exports, but no specific details have been provided yet. India has set an export target of USD 360 billion for this fiscal year, which would represent a 20% annual increase. However, government officials reckon that this objective will be difficult to achieve.
Author: Ricardo Aceves, Senior Economist