Exports growth slows to single digit in July
Aug 15 2014 , New Delhi
Trade deficit at $12.22b, gold imports fall 26%
Monthly trade data released by the government on Thursday pegged total exports in July at $27.72 billion.
Iron ore, which saw a 72 per cent contraction, along with electronics (20.14 per cent drop) and gems & jewellery (17.4 per cent fall) shrank the overall volume.
Exports grew at 12.4 per cent in May and at 10.22 per cent in June, prompting some analysts to interpret them as signs of revival in exports after a poor show in 2013-14, when annual exports stood at $312 billion.
India’s exports have hovered around $300 billion in the past few years, mainly due to the global economic slowdown and to some extent for the slowdown in domestic manufacturing.
Total exports in the first four months of this financial year (April-July) grew by 8.62 per cent to $107.8 billion. Imports dipped by 3.8 per cent during this period to $153.15 billion, which augurs well for the economy’s balance-of-payment situation, as trade deficit stood at $45.31 billion.
The drop in gold imports continued, falling 26.4 per cent in July to $1.81 billion from $2.46 billion in the same month a year ago. It was better in case of silver, whose imports contracted by 74.2 per cent to $0.13 billion.
The current account deficit went for toss at $88 billion, or 4.2 per cent of GDP, in 2012-13 as gold imports surged to $58 billion, prompting the government to slap several curbs on gold imports. In India’s import basket, gold is next only to oil.
Oil imports increased by 12.75 per cent in July to $14.35 billion while non-oil imports rose by 0.03 per cent to $ 25.6 billion.
The sectors that put up a good show on the exports front in July included textiles (up 13.3 per cent), petroleum products (28 per cent), engineering (23.9 per cent), leather (17.23 per cent), marine products (25 per cent), oil seeds (19.25 per cent), chemicals (16.67 per cent) and pharmaceuticals (10.78 per cent).
The Federation of Indian Export Organisations (Fieo) said gems and jewellery and electronics exports continued to be a cause of worry, as their negative growth was pulling down overall growth. The exporters’ body expects the government to announce some initiatives to boost exports in the forthcoming foreign trade policy due this month end.
Fieo president M Rafeeque Ahmed said July exports growth was less than expected. “But we stay on course to achieve $350 billion in 2014-15,” he said.
Ahmed was happy that engineering, chemicals, pharma, apparels, leather and marine goods continued to post better growth. The global trade scenario is improving with positive development in the EU, US and emerging economies and exports should reflect these developments in the coming months, he said.