India's exports for June 2012 declined 5.45 per cent over the same month last year to $25.06 billion mainly due to continuing poor demand in traditional markets such as Europe and the US.
During the month, shipments of engineering goods fell by 13 per cent, while other major items such as petroleum products and readymade garments experienced a 10 per cent contraction each.
Provisional data released by the Commerce Ministry on Friday also showed that imports shrunk 13.46 per cent at $35.37 billion, one factor being the fall in international oil prices which led to a lower oil import bill.
This, in turn, led to the trade deficit (gap between exports and imports) for June narrowing to $10.3 billion from $14.4 billion in June 2011. This is the lowest level of trade gap in 15 months. The trade deficit for 2011-12 had hit a record $185 billion, registering a 56 per cent increase over the previous fiscal.
'LOW GROWTH IN NEXT 2 YEARS'
Pointing out that there is a huge dip in world trade, the Commerce Secretary, Mr S. R. Rao, said the depressing trend is likely to continue for the next two years.
The European Union, that accounts for a fifth of India’s total exports, is going through a crisis. “In the euro zone, we don't see any finality. Besides the distress in Greece, we find that borrowings, both in Spain and Italy, are more than their actual GDP,” Mr Rao said.
He added that, “The sad news is that the US market is also contracting and so is the Chinese market. Japan is also showing distress.”
However, Mr Rao said he was hopeful that the entrepreneurial skills of the exporters along with the incentives given to them in the recent supplement to the Foreign Trade Policy as well as the Government’s efforts to reduce transaction costs will help India’s exports increase their market share even in these tough times.
The benefits of the incentives will begin to kick in from the next two months onwards, he said.
TEXTILES, LEATHER
Mr Rao said the good news is that the order books of the textiles sector are full and, therefore, there will be a spurt in exports in the coming months.
He said the leather sector, which carried out a major technological upgradation and has gone on to design new products, also got several export orders during the international leather fair held here.
SECTOR-WISE DATA
During June 2012, the export sectors that grew well in percentage terms were: rice (104 per cent), iron ore (40 per cent), oil meal (38 per cent) and spices (35 per cent).
In value terms, the main imports in June were: petroleum products ($12.6 billion); gold and silver ($1.9 billion); machinery ($2.7 billion); pearls and precious stones ($1.8 billion) and electrical goods ($2.6 billion).
The chief imports in terms of growth rates during the month were: medicinal products (14.7 per cent); vegetable oil (8 per cent); iron and steel (7.9 per cent), professional equipments (8.5 per cent) and artificial resins (5 per cent).
Q1 TRADE DATA
Meanwhile, exports for the first quarter of this fiscal (April-June 2012) shrunk 1.7 per cent to $75.2 billion, while imports fell 6.1 per cent to $115.26 billion. This resulted in the trade deficit coming down to $40.06 billion from $46.3 billion during the period.
During the first quarter, among the exports that dropped included petroleum products that shrunk by 15 per cent, readymade garments by 12 per cent and engineering goods contracted by 6.6 per cent.
However, in June as well as in the first quarter, drugs and pharmaceuticals exports grew by 1 per cent and 13.4 per cent respectively.
In value terms, exports of petroleum products during the first quarter stood at $12.9 billion, engineering goods ($14.6 billion), gems and jewellery ($10 billion), drugs and pharmaceuticals ($2.1 billion) and readymade garments ($3.2 billion).
Exports that have grown well in percentage terms during the first quarter include: rice (73 per cent), spices (32 per cent), drugs (13.4 per cent), oil meal (13.2 per cent) and fruits & vegetables (9.53 per cent).
During April-June 2012, imports of vegetable oil registered 49.8 per cent growth, sulphur (37 per cent), project goods (27 per cent), transport equipment (21.6 per cent), and artificial resin (21.3 per cent).
Major imports during the first quarter in value terms were: petroleum products ($41.5 billion), gold and silver ($9.4 billion); machinery ($8.5 billion); pearls ($4.6 billion) and electrical goods ($7.1billion).