In what could be the testing news for Indian economy, country’s exports contracted for the ninth month in a row leading to the widening of trade deficit. Expressing concern over the development in the crucial economic sector, the export body even sought for government intervention at the highest level.
While the exports registered the dip of 20.66 per cent in August tanking down to USD21.26 billion, Imports too declined by 9.95 per cent to USD 33.74 billion, according to the Commerce Ministry data. Steep decline in engineering and petroleum shipments is said to be the cause of slump in the exports.
This has also led to the Trade Deficit widening to USD 12.47 billion due to 140 per cent rise in gold imports in August from year-ago period. However, the deficit has narrowed as compared to July, when the figure stood at USD 12.81 billion.
Expressing disappointment over the dip, Federation of Indian Export Organisations (FIEO) said softening of prices of key agricultural and industrial inputs, coupled with dip in global demand, is the prime cause for the decline.
“The Prime Minister and the Commerce and Industry Minister should intervene in the matter. Immediate consultation with export bodies should be held to draw a roadmap for exports in such challenging time in which reaching last year’s exports figure looks difficult,” the FIEO said in a statement.
Meanwhile, gold imports increased to USD 4.95 billion in the month under review from USD 2.06 billion in August last year.
The main sectors which reported decline in exports include petroleum products (47.88 per cent), engineering (29 per cent), leather (12.78 per cent), marine products (20.83 per cent) and carpet (22 per cent).
Also, oil imports dropped 42.59 per cent in August to USD 7.35 billion. Oil imports account for about 31 per cent of the total imports. Petroleum product and engineering exports account for 18 per cent and about 25 per cent, respectively of the country’s total exports. Non-oil imports, however, grew by 7.01 per cent to USD 26.38 billion.
During the first five months (April-August) period, exports are down 16.17 per cent at USD 111.09 billion. Imports too have declined by 11.61 per cent to USD 168.6 billion, resulting in a trade deficit of USD 57.5 billion.
(With inputs from the PTI/agencies)