Exports slide for fifth month, fall 11% in Sept

Trade deficit at 16-month high due to rise in oil imports

Exports declined for the fifth consecutive month in September, falling 10.8 per cent to $23.7 billion, owing to sagging global demand, particularly in Europe and the US. Imports into the country, however, rose 5.1 per cent to $41.8 billion, widening the trade deficit to a 16-month high of $18.1 billion.

“The markets in Europe, the US and Japan are still not showing healthy growth,” said Rafeeque Ahmed, president of Federation of Indian Export Organisations. “Contraction in global demand and deceleration in manufacturing are the primary factors behind the decline in exports,” he said, adding the situation might improve in the second half of the financial year.

Between April and September, exports fell 6.8 per cent to $143.6 billion, compared with $154.15 billion in the corresponding period last year, while imports contracted 4.36 per cent to $232.9 billion. Trade deficit for the period stood at $89.2 billion, compared with $89.4 billion in April-September 2011. The high trade deficit is a concern, as it leads to a rise in the country’s current account deficit.

Industrial output data for August is slated to be released tomorrow. These figures are likely to be low, as indicated by core sector growth in August—just 2.1 per cent, against 3.8 per cent a year earlier. The eight core sector industries have a weight of about 38 per cent in the Index of Industrial Production.

In the April-July period, industrial output fell 0.1 per cent, against growth of 6.1 per cent in the corresponding period last year.

If today’s trade figures are any indication, industrial growth may not improve much in September as well. This is because demand in markets abroad has not improved; imports rose largely because of oil products.

Oil imports in September rose 30.74 per cent to $14.1 billion, against $10.77 billion in September 2011. However, non-oil imports fell 4.46 per cent to $27.68 billion. While oil imports during the April-September period rose 6.8 per cent to $80.8 billion, non-oil imports fell 9.8 per cent to $152.1 billion during the period.