The country’s exports declined for the seventh straight month, falling 15.82 per cent year-on-year in June at $22.28 billion due to a sharp decline in petroleum products, slowdown in manufacturing and soft external demand, and raising concerns about the economic recovery.
According to the data released by the commerce ministry, engineering goods (-5.56 per cent), electronic goods (-9.85 per cent), and petroleum products (-52.97 per cent) witnessed steep declines in the outbound shipments during June. The rate of decline in June was less than over 20 per cent in May. The outbound shipments shrank 16.75 per cent to $66.7 billion in the first quarter of the current fiscal, according to the data.
Imports too contracted during the month by 13.4 per cent at $33.1 billion as against $38.24 billion during the same period last fiscal, narrowing the trade deficit to $10.9 billion against $11.8 billion in the last fiscal.
During the April-June quarter, imports contracted 12.61 per cent at $98.9 billion, marginally reducing the trade deficit to $32.2 billion as compared to $33.1 billion in the corresponding period of the previous year.
Expressing disappointment over the continued dip in exports, the Federation of Indian Exports Organisations (Fieo) said that while moderating external demand is the main cause of the dip, “the slowdown in manufacturing, strengthening of rupee against dollar at a time when other currencies have weakened substantially, high cost of credit and increasing logistics cost contributed in no less measure.”
Fieo president SC Ralhan said that while external conditions may improve from September, to bring the exports back on track, domestic constraints have to be addressed first.
According to the import data, while import of petroleum products contracted 34.97 per cent, gold imports were down by 36.96 per cent, organic and inorganic chemicals were down 4.52 per cent and the import of machine tools contracted 16.34 per cent.
Non-oil imports during June also saw a dip of 1.85 per cent at $24.44 billion compared to $24.90 billion in June 2014. During the first quarter, non-oil imports stood at $74.25 billion, up 2.55 per cent year-on-year.
Concerned over the falling exports, the Centre has roped in states to boost international trade. Earlier during the day, commerce secretary Rita Teaotia met senior officials from states, urging them to address the infrastructural bottlenecks and formulate export strategies to provide a fillip to exports. Some 21 states have appointed export commissioners and 16 states have drawn export strategies to address concerns of exporters in their states. Fieo urged the government to immediately release the interest subvention for exports and focus on aggressive marketing to showcase Indian products to prop up the trade.