India’s export recovery not yet broad based: Report

MUMBAI: Even as global economy looks to be on a rather bumpy ride, Indian exports, which are mainly dependent on the US, China and Europe have still not recovered, according to a research report by Nomura.

“India’s merchandise export growth turned decisively positive last September after nearly two years of contraction. Yet, there is a wide variance for these exports by destination,” the report said.

India’s exports to the US, Eurozone and Japan however jumped by 1.2% according to the report. “Exports to G3 (US, Eurozone and Japan) rose by 1.2% y-o-y in January after rising by 1.9% in 2016. In contrast, exports to all other regions combined are still contracting, falling by 8.1% y-o-y in January after a 3.6% decline in 2016,” Nomura report said.

According to Nomura the recent rise in the export orders index of the manufacturing PMI to 50.7 in February from 49.8 in January suggests this turnaround in exports growth should continue over the near term. However, data on exports by destination suggest the demand recovery is not yet broad-based.

This week the government said that India’s GDP grew by about 7% in the third quarter ended December 2016. On Tuesday however, a Nomura report has stated three reasons why this may have happened.

The report also questioned India's GDP data. The repot asked whether India's GDP data is a fact or fiction.

“The discrepancy between the official GDP statistics (robust) and ground-level data (weak) has been a concern ever since the start of the new GDP series. The gap has become even more glaring in the aftermath of demonetisation,” the report said.