India's exports dropped by 6.05 per cent to USD 26.13 billion in August mainly on account of significant dip in shipments from key sectors such as petroleum, engineering, leather, and gems & jewellery. Imports too declined by 13.45 per cent to USD 39.58 billion, narrowing trade deficit to USD 13.45 billion in August, according to the government data released on Friday.
The imports during the month slipped the most after August 2016, when it had contracted by 14 per cent. The trade deficit stood at USD 17.92 billion in August 2018.
Out of 30 key sectors, as many as 22 showed negative growth in August. Shipments of gems and jewellery, engineering goods, and petroleum products contracted by 3.5 per cent, 9.35 per cent and 10.73 per cent, respectively.
The sectors which recorded positive growth in the last month include iron ore, electronic goods, spices, and marine products. The country's outbound shipments have remained subdued so far this year. It will have implications on the overall economic growth, which has reported over six-year low growth of 5 per cent in the first quarter of the current fiscal.
India's industrial production growth too slowed to 4.3 per cent in July, dragged mainly by manufacturing sector's poor show, according to a government data. Commerce Minister Piyush Goyal yesterday said India will have to achieve USD one trillion exports in the next five years, and for this there is a need to increase domestic production and improve competitiveness.
In August, oil imports declined by 8.9 per cent to USD 10.88 billion, and non-oil imports fell by 15 per cent to USD 28.71 billion. Cumulatively, during April-August 2019, exports were down 1.53 per cent to USD 133.54 billion, while imports contracted by 5.68 per cent to USD 206.39 billion.
Gold imports plunged 62.49 per cent to USD 1.36 billion in the month. Commenting on the figures, Ludhiana-based exporter S C Ralhan said this is the right time for the government to announce incentives.
"Merchandise export from India scheme (MEIS) should not be withdrawn. The government must start thinking that EPCG (export promotion for capital goods) policy should be simplified to promote manufacturing and import of machines under EPCG should not have any export obligation for manufacturer exporters," Ralhan said. Council for Leather Exports (CLE) Chairman Panaruna Aqeel Ahmed said this could be a temporary phenomena and the exports would start growing in the coming months.
"We are eagerly waiting for an export package," Ahmed said. Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said that such a contraction in exports is a reflection of uncertainties, sluggish global demand and rising tariff war.
"Domestic issues including access to credit, cost of credit especially for merchant exporters, interest equalization support to all agri-exports, and quick refund of GST should be seriously looked into," he said.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)