Export of goods declined for the sixth consecutive month in August 2020, posting a fall of 12.66 per cent (year-on-year) to $22.7 billion as major sectors such as petroleum, gems and jewellery, engineering goods, ready-made garments and leather items continued to slide.
Trade deficit during the month shrank by half to $6.7 billion, as imports fell 26.04 per cent to $29.47 billion.
Imports of major items that declined include petroleum, chemicals, machinery, transport equipment, iron and steel, non-ferrous metals and project goods, as per provisional figures released by the Ministry of Commerce & Industry on Tuesday.
Import of gold, however, increased by 171 per cent to $3.7 billion.
“Continuous fall in exports in August clearly shows the grave challenges of the global marketplace, which is bearing the huge impact of never-seen-before health crisis (Covid-19), escalating trade war between the world’s two largest economies and the rising geopolitical risks. Engineering exports, the largest contributor to the merchandise export basket, have seen a significant fall of 7.69 per cent in August, making it imperative for the government to extend its helping hand,” said Mahesh Desai, Chairman, EEPC India.
Exuding confidence, Commerce Minister Piyush Goyal pointed out that early data collected for September 2020 showed that in the second week of the month (September 8-14), exports increased by 10.73 per cent to $6.88 billion from $6.21 billion in the comparable period last year.
“...India is in a mood to get back. The resilience is showing. Our confidence is emerging.... I have no doubt that we will definitely recover. Businesses will get back on track,” he said speaking at an even organised by CII. Exports in April-August 2020-21 were down 26.65 per cent to $97.66 billion while imports declined 43.73 per cent to $118.38 billion. Trade deficit during the period shrank to $20.72 billion compared to $77.25 billion in April-August 2019-20.
The sharp fall in exports, which started in March, can be largely attributed to the disruptions caused by the Covid-19 breakout in the country. However, with economies worldwide trying to totter back to normalcy, exporters have new orders coming in.