Hit by global slowdown, India’s exports contracted for the eighth straight month by 10.3 percent in July to USD 23.13 billion, pushing the trade deficit to USD 12.81 billion. In July 2014, the merchandise exports had amounted to USD 25.79 billion. The last time exports registered a positive growth was in November, when shipments expanded at a rate of 7.27 percent.
Experts fear that exports may suffer in the coming months on account of the impact of devaluation of the Chinese currency. Due to this, Indian products may loose its competitiveness in the global market. Imports, too, declined by 10.28 percent to USD 35.94 billion in July this year due to fall in oil imports, leaving an eight-month high trade deficit of USD 12.81 billion, according to the data released by the Commerce Ministry.
However compared with July last year, when it was USD 14.27 billion, the deficit has narrowed. The main exporting sectors which reported negative growth last month include petroleum products (about 43.22 percent), leather and leather goods (10.15 percent), marine products (17.6 percent) and chemicals (6.22 percent). Exporters said that continuous decline is a concern but the lowering of contraction in July is a good sign which may have a positive bearing on August numbers.
“Going by increase in container traffic in first fortnight of August, we expect that the exports numbers would move northwards in August and subsequent months. The improvement in manufacturing will also support exports,” Federation of Indian Export Organisations (FIEO) President S C Ralhan said. He said that the depreciation of Yuan, if happen further, may impact the expected growth in exports from November.
Also, oil imports dropped 34.91 percent in July to USD 9.48 billion. Oil imports account for about 31 percent of the total imports. Petroleum product exports account for 18 percent of the country’s total exports.
Non-oil imports, however, grew by 3.8 percent to USD 26.46 billion. Gold imports increased by 62.22 percent to USD 2.96 billion in July. During the first four months (April-July) of the current financial year, exports are down 15.04 percent at USD 89.82 billion.
Imports too have declined 12.01 percent to USD 134.86 billion, resulting in a trade deficit of USD 45 billion.