India’s exports declined for the second consecutive month in June 2013 as uncertainty in the global economy depressed demand. But a sharp slowdown in gold import compared to the previous two months has helped check the rising trade deficit.
Exports in June 2013 dipped 4.56 per cent to $23.78 billion compared with $24.92 billion in June 2012, while imports declined by a smaller 0.37 per cent to $36.03 billion compared with $36.16 billion last year.
“Remedial measures, if required, would be taken,” Director General of Foreign Trade Anup Pujari said adding that the Government was hopeful that the export incentive package announced in April would start showing results soon.
A steep decline in import of gold and silver to $2.45 billion in June 2013 from $8.4 billion and $7.5 billion in May and April respectively following increase in import duties on gold and other stringent conditions placed on imports by the RBI played a key role in containing trade deficit at $12.2 billion.
“The decline in trade deficit is also due to slowdown in import of gold. It is possible to attribute this to measures on gold taken by the Government, particularly the RBI,” Pujari said while releasing the trade figures to the media on Friday.
The fall in trade deficit levels in June has come as a relief for the Government as the high deficit levels in the preceding two months at $20.14 billion and $17.79 billion respectively had widened the current account deficit and further stressed the balance of payment position.
The DGFT said that despite reports of an improvement in the US economy, global prospects remained uncertain. “China has said that its exports have fallen despite the US being a large buyer. So, we have to wait and watch the situation,” Pujari said. The EU market also continues to be shaky.
Exporters have suggested that the RBI’s special refinance window for PCFC (packing credit in foreign currency) by way of US Dollar-Rupee swap facility should be extended as availability of adequate credit was a genuine problem faced by all exporters.
“The swap facility may be extended beyond June 2013 till at least March 2015 and the corpus may be enhanced $20 billion,” FIEO President Rafeeque Ahmed said.
Oil imports continued to be high in June 2013 at $12.76 billion which was 13.74 per cent higher than the $11.22-billion imports in June last year. Non-oil imports in June at $23.67 billion was 6.71 per cent lower than imports worth $24.94 billion in June 2012.
Cumulative exports during April-June 2013-14 declined 1.41 per cent to $72.45 billion. However, imports during the period were up 5.99 per cent to $122.6 billion.
The trade deficit for April-June 2013-14 was at $50.18 billion which was higher than the first quarter deficit of the previous fiscal at $42.21 billion.