IThe Government's miseries on the economic front are mounting. After a flat industrial output growth in April, the provisional data released on Thursday by the Commerce Ministry revealed that exports in May shrank 4.16 per cent year-on-year to $25.68 billion.
The growth slump (the second time in three months) was due to the weak demand in the traditional markets — the European Union and the US.
Reflecting the manufacturing and domestic demand slowdown, imports in May contracted 7.36 per cent to $41.9 billion. This led to trade deficit falling to $16.3 billion from $18.5 billion in May 2011. But the trade gap in May widened from $13.4 billion in April 2012.
Four (engineering, petroleum products, gems and jewellery and ready-made garments) of the top five export segments registered negative growth in May.
Meanwhile, petroleum product imports grew 14.02 per cent to $14.9 billion, while gold and silver imports fell 52 per cent to $4.3 billion.
The Commerce Secretary, Mr S.R. Rao, said incentives for export diversification to Asia, Latin America and Africa, along with the softening crude oil prices and the official forecast of normal monsoon could boost export growth.
To recalibrate the export strategy, an analysis is being done on the countries with which India has a trade surplus (the US, Singapore and the Netherlands) and a trade deficit (China, Switzerland, Saudi Arabia, Iraq and Kuwait).