India: Contraction in exports lessens in May
June 15, 2016
India’s shipments abroad decreased for the 18th consecutive month in May, but the pace of contraction was the softest. Exports totaled USD 22.2 billion in May, which represented a 0.8% decrease over the same month last year. May’s contraction followed the 6.7% drop in April and marked the softest contraction since India’s overseas sales began to decrease uninterruptedly in December 2014. May’s result reflected that non-oil sectors, such as engineering as well as gems and jewelry manufacturers saw a rise in exports.
On the other side of the balance, imports totaled USD 28.4 billion in May, which plunged 13.2% over the USD 32.8 billion recorded in the same month last year. The decrease reflected mainly lower oil imports, which fell 30.5% year-on-year.
India’s trade deficit increased in May for the first time in five months. The deficit widened to USD 6.3 billion in May from USD 4.8 billion in April, which had marked the smallest shortfall in five years. Low oil prices are reducing the import bill of the hydrocarbon and, in turn, improving India’s trade balance. In fact, the 12-month rolling trade deficit continued to improve in May. It totaled USD 108 billion, which was smaller than the USD 112 billion trade deficit recorded for the 12 months up to April.