June exports slide for 7th month, down 15.82%

Imports fall 13.4%, non-oil imports decline 4.3% in May

Merchandise exports in June contracted 15.82 per cent to $22.28 billion compared to $26.47 billion in the same month last year. This was for the seventh straight month that shipments from India witnessed a decline mainly on account of weaker demand largely due to crisis in China and Greece.

In May, the rate of decline of exports was higher at 20.19 per cent.

Total exports in the first quarter of this financial year also plummeted 16.75 per cent to $66.69 billion compared to $80.11 billion in the corresponding period last year, according to the trade data released here on Wednesday by the ministry of commerce and industry.

Imports in June, on the other hand, were 13.40 per cent lower reaching $33.11 billion compared to $38.24 billion. Cumulatively, imports saw a decline of 12.61 per cent at $9.89 billion as against $11.31 billion in June last year.

Interestingly, for the last couple of months, non-oil imports are also falling continuously. In May and June, non-oil imports declined 2.24 per cent and 1.85 per cent at $24.76 billion and $24.90 billion, respectively.

Gold imports in June came down by 36.96 per cent to $1.96 billion compared to $3.12 in June 2014.

In the last three months, non-oil non-gold imports have been more or less steady barring only May when it contracted 4.3 per cent. In April and June they registered a growth rate of 7.1 per cent and 3.2 per cent respectively.

“Decline in non-oil imports for the last two months consecutively, indicate a trend that manufacturing is not picking up… Export fall in June was expected. The uncertainty in global economy on account of what is happening in China and Greece is having its impact on exports. This trend is likely to continue till the second quarter-end, although the outlook for exports looks dicey. Exports would see a turnaround in the second half of the year when Christmas holidays approach,” said Soumya Kanti Ghosh, chief economic advisor, State Bank of India (SBI).

The only silver lining was trade deficit that remained steady at $10.83 billion compared to $10.41 billion in May.

In June, oil imports came down by 34.97 per cent to $8.67 billion as against $13.34 billion in June 2014. Total oil imports during April-June declined 39.54 per cent at $24.65 billion compared to $40.78 billion in the corresponding period of the last financial year.

According to Aditi Nayar, senior economist, ICRA, the continuous fall in non-oil exports remains a “source of apprehension.”

“In particular, the contraction in shipment of items such as engineering and electronic goods, reinforces concerns regarding the feebleness of external demand,” Nayar stated.

In June, export of engineering and electronic goods declined 5.56 per cent and 9.85 per cent at $5.09 billion and $0.47 billion, respectively.

“The interest subvention for exports should be released immediately as the inordinate delay is dampening the spirit of exporters, which is otherwise low due to global conditions,” said SC Ralhan, president, Federation of Indian Export Organisations (FIEO).

In an effort to strengthen export performance the commerce secretary Rita Teaotia on Wednesday convened a meeting of state government representatives and asked them to come out their own respective trade policies.
DOWNWARD SPIRAL

• Merchandise exports in June contracted 15.82% to $22.28 bn in the corresponding month last year
• In May, the rate of decline of exports was higher at 20.19%
• Total exports in the first quarter of this financial year plummeted 16.75% to $66.69 bn
• Imports in June, on the other hand, were 13.40% lower reaching $33.11 billion compared to $38.24 bn
• Cumulatively, imports saw a decline of 12.61% at $9.89 bn as against $11.31 bn in June last year