The trade data released for the month of April has raised a set of serious concerns on the health of India’s trade account. Exports were down by 14% for the month of April to $22 billion. This becomes a little more disconcerting on the back of a 21% fall in exports in the month of March 2015. But, is this really a worry?
Yes, of course, it is…
The current government has been in power for the last 12 months and this is the 5th consecutive month that India has witnessed a fall in exports. The total exports for the fiscal year 2014-15 was just about $310 billion against a modest target of $340 billion, a shortfall of almost 10%. What is more worrying is that this consistent fall in exports has happened at a time when the Indian rupee has been consistently weakening closer to the 65/$ mark. This beats orthodox logic because normally a weak rupee is associated with a surge in exports. What about imports? Continue reading →
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