Merchandise exports in July fell 14.8 per cent year-on-year to $22.4 billion. Releasing the provisional data on Tuesday, the Commerce Ministry attributed the decline to the continuing poor demand in traditional markets such as the European Union and the US.
The fall in growth was a ‘three-year-low’ (exports had contracted 23.5 per cent in August 2009), and was the third consecutive decline in this fiscal. In value terms, it was the worst performance since November 2011.
Exports of most major segments declined with shipments of petroleum products plunging 19.4 per cent during the month, while engineering goods shrunk 16 per cent. Increasing domestic demand and an erratic monsoon meant a majority of the petroleum items produced was being consumed within the country itself, leading to fall in exports.
The Commerce Secretary S. R. Rao said meeting the $360 billion export target for 2012-13 would be a “stiff challenge” due to the continuing decline in global trade.
Rao said the Commerce Ministry would hold regular meetings with all stakeholders and soon take some “tactical” steps “in the nature (of easing) technical barriers to exports or reducing transaction costs to make exports more competitive.”
Meanwhile, imports also contracted 7.61 per cent to $37.9 billion. This resulted in trade deficit for July 2012 going up to $15.5 billion against $14.8 billion in the same month last year. Oil imports in July slipped 5.52 per cent.
Data error
Exports during April-July this fiscal too contracted 5.3 per cent to $97.6 billion. The Ministry initially stated it as $80.44 billion as against $88.45 billion in April-July 2011. Later, it gave the corrected figures as $97.6 billion and $102.8 billion (for the same period last fiscal).