Contracting for the second month in a row, India’s merchandise exports fell 0.3 per cent to $23.51 billion in August on persistent weak demand in developed markets and subdued prices.
However, the trade deficit narrowed to $7.67 billion from $12.4 billion in the corresponding month a year ago, thanks to sober world crude prices and a sharp fall in gold imports, apart from sluggish industrial imports. The country’s import bill declined 14.1 per cent to $29.2 billion in the month. Export growth had turned positive in June after a declining trend that stayed for 19 months.
The main export sectors that recorded negative growth in the month include petroleum (14 per cent), leather (7.82 per cent) and chemicals (5 per cent). The Federation of Indian Export Organisations (FIEO) said the decline has largely been arrested and now “we can look for positive growth from October onwards”.
According to RBI data released on Thursday, India’s services exports in July stood at $12.77 billion, a decline of 4.11 per cent; in the year-ago month a 1.03 per cent fall was reported. Services imports in July were $7.4 billion, a fall of 11.68 per cent as compared to a positive growth of 5.89 per cent in the previous month.
The trade balance in services (net exports) for July was estimated at $5.37 billion.
The net export of services for April- July of FY17 was estimated at $21.56 billion which is lower than net export of services of $22.37 billion during April- July of FY16.
The World Trade Organization in April trimmed its 2016 global trade growth forecast by 1.1 percentage points. It predicted that global trade would rise 2.8 per cent in 2016, lower than its previous forecast of 3.9 per cent announced in September last year.
This will be the fifth straight year of trade growth below 3 per cent, which is also much lower than the average annual expansion of 5 per cent since 1990, according to the WTO data. FE