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Exports decline 21% to $21 billion in August

Imports fall 10% to $33.7 billion; trade deficit widens to $12.5 billion

BS Reporter 

Exports decline 21% to $21 billion in August

Merchandise plunged 20.7 per cent to $21.3 billion in August from $26.8 billion in the year-ago period, the ninth consecutive monthly decline and the steepest in the first five months of this financial year. The fall resulted from a massive demand slowdown in global markets and an uncertain global economic environment, owing to a crisis in China.

The value of in August was the lowest in about five years.


India wasn’t the only Asian country to see a steep fall in A YES Bank note said from Korea declined 14.7 per cent in August, the most in six years, while those from China contracted 5.5 per cent.

For April-August, from India stood at $111.1 billion, down 16.2 per cent compared with $132.5 billion in the year-ago period, according to data released by the commerce and industry ministry on Tuesday.

“Average growth in export volumes remains subdued … In a nutshell, both the value and volume impact should continue to weigh on the trajectory in FY16,” said Shubhada Rao, chief economist, YES Bank.

In August, shrunk 9.9 per cent to $33.7 billion from $37.5 billion a year earlier. For April-August, fell 11.6 per cent to $168.6 billion from $190.7 billion in the year-ago period. imports, however, jumped 140 per cent to $4.95 billion.

Exports decline 21% to $21 billion in August
Aditi Nayar, senior economist, ICRA, said the surge in was mainly due to a decline in prices of the commodity. Others attributed it to the coming festival season.

Oil declined 42.6 per cent year-on-year to $7.35 billion, compared with $12.8 billion in August last year. For April-August, these stood at $41.5 billion, down 38.8 per cent year-on-year.

Though it might appear that industrial activity saw a turnaround, as non-oil rose 7.01 per cent to $26.4 billion in August, a closer look shows much of the growth is coming from

Non-oil, non-contracted 4.4 per cent, showing demand for industrial goods was yet to pick up, evident from the fact that the import of project goods almost halved to $206.7 billion in August.

For August, the stood at $12.5 billion, compared with $12.8 billion in July. For April-August, the deficit stood at $57.5 billion, against $58.2 billion in the corresponding period of 2014.

“The isn’t providing a cushion anymore, which is beginning to be an uneasy factor. For the past two months, it is around $12 billion and this, coupled with the fact that the withdrawal by FIIs (foreign institutional investors) is depleting forex, is becoming a concern. Unfortunately, due to this, advantages from a fall in crude oil prices aren’t available to us,” said Madan Sabnavis, chief economist, CARE Ratings.

In August, goods that fared poorly in terms of included petroleum products, which declined 47.9 per cent to $2.77 billion. While of engineering goods fell 30 per cent, those of iron ore declined 34.3 per cent and electronic goods 17.4 per cent. Exporters said softening of the prices of key agricultural and industrial inputs, coupled with a contraction in global demand, was the primary reason behind the decline.

The Federation of Indian Export Organisations appealed to the government for “immediate introduction” of three per cent interest subvention and sought the commerce and industry minister’s intervention in the matter.

In a recent interaction with Business Standard, Commerce Minister had said the government would roll out the interest subvention scheme soon.

During the month, shrunk 9.9 per cent to $33.7 billion from $37.5 billion in August 2014. For April-August, fell 11.6 per cent to $168.6 billion from $190.7 billion in the year-ago period.

However, jumped 140 per cent --- from $2.06 billion to $4.95 billion.

Aditi Nayar, senior economist, ICRA, believes the surge in import is due to a decline in prices.

The widened to $12.5 billion in August from $10.8 billion in the corresponding month last year. For April-August, the was $57.5 billion, against $58.2 billion in the year-ago period.

'The isn't providing any cushion anymore, which is beginning to be an uneasy factor. For the past two months, it is at around $12 billion and this, coupled with the withdrawal of FIIs (foreign institutional investors), is causing depletion in forex and is a concern. Unfortunately, due to this, the advantages of a fall in crude prices aren't available to us,' said Madan Sabnavis, chief economist, CARE Ratings.

He added despite the rupee being the strongest among emerging market currencies, Indian exporters aren't able to avail of this due to shortage of demand.

Oil declined 42.6 per cent to $7.35 billion from $12.8 billion in August last year. For April-August, these stood at $41.5 billion, 38.8 per cent lower than $67.8 billion in the year-ago period.

Non-oil import stood at $26.4 billion, 7.01 per cent more than $24.65 billion in August 2014. For the first five months of this financial year, non-oil were $127.1 billion, up 3.39 per cent year-on-year.

First Published: Wed, September 16 2015. 00:58 IST
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