The decline in overall imports, including oil and gold, led to the narrowing of the trade deficit — the difference between imports and exports.
India’s exports growth turned positive in July, spurting 2.25 per cent, while trade deficit narrowed to a four-month low of USD 13.43 billion, government data showed on Wednesday. Exports increased to USD 26.33 billion in July as against USD 25.75 billion in the same month last year. The decline in overall imports, including oil and gold, led to the narrowing of the trade deficit — the difference between imports and exports. Trade deficit in July 2018 stood at USD 18.63 billion. The previous low was in March 2019, when this gap was at USD 10.89 billion.
Gold imports declined 42.2 per cent to USD 1.71 billion in July. Oil imports fell 22.15 per cent to USD 9.6 billion, while non-oil slipped by 5.92 per cent to USD 30.16 billion.
Export sectors that showed positive growth in the last month included chemical, iron ore, electronics, marine products and pharmaceuticals. However, shipments of some key sectors recorded negative growth, including gems and jewellery (- 6.82 per cent), engineering goods (- 1.69 per cent) and petroleum products (- 5 per cent), according to the data. Cumulatively, during April-July 2019, exports dipped 0.37 per cent to USD 107.41 billion, while imports contracted by 3.63 per cent to USD 166.8 billion.
Trade deficit during the four-month period narrowed to USD 59.39 billion as compared to USD 65.27 billion in the same period last fiscal. Oil imports in April-July 2019-20 were at USD 44.45 billion, which was 5.69 per cent lower as compared to USD 47.13 billion in the same period last year. Commenting on the data, Federation of Indian Export Organisations (FIEO) said the sluggish global demand and uncertainties emanating from tariff wars are clearly visible in the slowdown in exports across the globe.
“Domestic issues including access to credit, cost of credit especially for merchant exporters, interest equalisation support to all agri exports, benefits on sales to foreign tourists and quick refund of GST should be seriously looked into,” FIEO President Sharad Kumar Saraf said. Trade Promotion Council of India (TPCI) Chairman MohitSingla said to some extent this export growth is partially on account of rupee, which has depreciated by about 3.5 per cent in the past six weeks, which gives an impetus for short-term export gains. “Since the consumption rates in India have plummeted, demand has been squeezed, especially for precious stones and electronic goods,” Singla said.
India’s exports growth entered the negative zone after a gap of eight months in June, recording a decline of 9.71 per cent, amid global headwinds. The World Bank in its Global Economic Prospects (June 2019) has projected weakening of global trade in 2019.Global trade is projected to grow at 2.6 per cent this year, a full percentage point below its previous forecast.