Economy: Exports dip by 6.57 % in September; Trade deficit narrows as Imports too decline
New Delhi, Oct 15: India's exports remained in the negative zone for the second consecutive month in September contracting by 6.57 per cent to USD 26 billion mainly on account of a significant dip in shipments of petroleum, engineering, gems & jewellery and leather products.
Imports too declined by 13.85 per cent to USD 36.89 billion in September, narrowing the trade deficit to a seven-month low of USD 10.86 billion, according to the government data released on Tuesday. Gold imports plunged 62.49 per cent to USD 1.36 billion in the month.
Imports during the month slipped the most after August 2016, when inbound shipments had contracted by 14 per cent. The trade deficit stood at USD 14.95 billion in September 2018. Out of the 30 key sectors, as many as 22 segments showed negative growth in exports during the month under review. Shipments of gems and jewellery, engineering goods, and petroleum products contracted by 5.56 per cent, 6.2 per cent and 18.6 per cent, respectively.
The country's outbound shipments have remained subdued so far this year. It may have a bearing on the overall economic growth, which fell to over six-year low of 5 per cent in the first quarter of the current fiscal. Industrial output declined by 1.1 per cent in August due to poor performance by manufacturing, power generation and mining sectors. In September, oil imports declined by 18.33 per cent to USD 8.98 billion, and non-oil imports fell by 12.3 per cent to USD 27.91 billion.
Cumulatively, during April-September 2019, exports were down 2.39 per cent to USD 159.57 billion while imports contracted by 7 per cent to USD 243.28 billion. Trade deficit during the period narrowed to USD 83.7 billion as against USD 98.15 billion in April-September 2018-19.
Ludhiana-based exporter S C Ralhan called for immediate release of foreign trade policy by the government to arrest the downfall.
"Government should immediately announce foreign trade policy. If it will be delayed, the government would not be able to control the damage," Ralhan said. Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said declining trend in exports does not augur well for the overall growth of the economy.
"Domestic issues including access to and cost of credit still remains a problem area for MSMEs and especially for merchant exporters, interest equalization support to all agri exports should be quickly and seriously looked into," he said. Trade Promotion Council of India Chairman Mohit Singla said that there is a definite sign of manufacturing slowing down owing to the sluggish market demand, which has taken a hit at export.
"Falling agri commodity exports are a matter of concern for major stakeholders. Knowing the fact of price competitiveness and sluggish demand there still remains other archaic challenges related to respective products," he added.