Global slowdown and deceleration in domestic manufacturing pulled down India’s exports by 4.16 per cent to USD 25.68 billion in May.
According to the provisional data released today by the Commerce Ministry,imports dipped by a sharper pace of 7.36 per cent to USD 41.9 billion.
The contraction in imports reflects slowdown in fresh investments as inward shipments of plant and machinery fell by 8 per cent during the month under review.
The trade deficit narrowed to USD 16.2 billion in May,from USD 18.4 billion a year ago.
Dismal export performance comes at a time when India’s economic growth slipped to 9-year low of 6.5 per cent in 2011-12 and flat industrial output growth in April.
Commerce Secretary S R Rao has said that contraction of demand in India’s traditional markets particularly in Euro zone economies was hurting exports.
“The decline in exports is mainly due to the global slowdown and deceleration in domestic manufacturing. Many countries are facing huge setback in exports and India is no exception to it,” Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed said.
During April-May 2012,India’s shipments contracted by 0.69 per cent to USD 50.13 billion from USD 50.48 billion in the same period last year.
Decline in exports in May were particularly witnessed in top exporting commodities like petroleum products (-26 per cent),engineering goods (-15.67 per cent),gems and jewellery (-9 per cent) and readymade garments (-15.82 per cent).
On the import front,gold and silver was down by about 51 per cent,while plant and machinery dropped 8 per cent.
However,imports of crude oil were up 14 per cent.
During the first two months of the current fiscal,imports contracted by 2.42 per cent to USD 79.88 billion from USD 81.87 billion. Trade deficit during the period declined to USD 29.75 billion,from USD 31.38 billion in April-May 2011.
While oil imports in May grew by 14.02 per cent to USD 14.98 billion,non-oil imports declined by 16.11 per cent to USD 26.95 billion.
During April-May 2012,oil imports rose by 10.51 per cent to USD 28.89 billion from USD 26.14 billion in the corresponding period last year.
However,non-oil imports declined by 8.49 per cent to USD 50.99 billion.
Exports dip due to global gloom,fall in manufacturing :Fieo
The 4.16 percent fall in exports for May is due to slowdown in consumers of Indian goods globally and a fall in domestic manufacturing,the Federation of Indian Exporters Organisations (FIEO) has said.
“The decline in exports is on account of global trade slowdown and deceleration in domestic manufacturing,” Fieo president M Rafeeque Ahmed said in a statement here today.
Earlier in the day,commerce and industry ministry data said exports declined by 4.16 percent year-on-year in May to USD 25.68 billion against USD 26.79 billion in the year ago period. In April too,shipments contracted by over 5.2 per cent.
Ahmed said many countries across the world are facing similar problems and exuded confidence that there will be a pick up in exports in the second half of the fiscal.
The increase in exports during the second fiscal will help in ensuring that the country meets the targeted 15-20 percent rise in outbound shipments,which have to touch USD 350 billion by FY13.
Exporters should explore new markets,find new buyers in the existing markets and take full advantage of fall in the rupee,Ahmed suggested.
There is also a need for the exporters to increase their productivity through efficiency and cost cutting measures,he added.