India’s exports contracted 3.67 per cent in February following seven months of sluggish growth. Achieving the export target of $325 billion for the current fiscal now appears almost beyond reach.
The decline in imports was sharper, at 17.09 per cent (to $33.81 billion), with gold imports continuing to take a hit due to import restrictions. The trade deficit narrowed to $8.13 billion from $14.12 billion last year.
The fall in exports of items such as petroleum products, drugs, plastics and linoleum, coffee, oil meals, engineering products and electronic goods pulled down exports by 3.67 per cent to $25.68 billion in February 2014 from the same month last year.
Apart from low global demand and withdrawal of tariff concessions by the European Union for some products, Commerce Secretary Rajeev Kher said there were some specific factors behind the fall in exports (such as restrictions faced by drug companies in the US) that needed to be looked at.
Some exporters blame the fall on the Finance Ministry blocking duty reimbursement payments for the last four months.