Merchandise exports fall 6.8% in July

Merchandise exports contracted by 6.8 per cent in July, belying hope of a rising trend after outbound shipments increased 1.3 per cent in June, the first increase in 19 months.

Exports fell to $21.7 billion in July, against $23.3 bn in June 2015, government data showed on Friday. These had declined from November 2014 to May 2016. As compared to this, the decline was for nine months in a row during the 2008-09 global financial meltdown,

The fall in July was attributed to global slowing, particularly in the Chinese economy, leading to a decline in commodity prices. Cumulative exports for April-July, first four months of 2016-2017, were $88 bn, about 3.6 per cent lower than the $9.3 bn for the comparable period in the past financial year.

Imports also declined, by about 19 per cent to $29.5 bn in July as compared to the year-ago period, when it was $36.4 bn. Cumulative imports in the current financial year were nearly $114 bn, as compared to $136.3 bn in the same period the previous year.

The trade deficit declined to $7.8 bn in July against $13.1 bn in the same month of 2015. The cumulative deficit in merchandise trade for April-July of FY17 was $27 bn, from $46 bn in the corresponding period of FY16.

Total exports were $261 bn in 2015-16, a 15.8 per cent decline from the $310 bn in 2014-15. The government had initially targeted $300 bn and then had to revise this to $260-270 bn.

On the latest fall, S C Ralhan, president, Federation of Indian Exports Organisations, said global trade uncertainties were increasing, compounded by the British vote to leave the European Union.

Non-oil and non-gold imports, taken as a proxy for an indicator of industrial demand, declined 23.8 per cent to $19.7 bn in July from $25.8 bn a year before. It had declined by 1.1 per cent to $22.2 bn in June.

Gold imports continued to fall by a large margin for a sixth month, down by 63.6 per cent to $1.1 bn as compared to the nearly $3 bn a year before. Gold prices had fallen by 38.5 per cent in July.

Experts felt export would rise only slowly ,pointing to 30 majo items where outbound trade fell for 22, as compared to only six of these in June.

Export of engineering goods, which made a comeback in the growth charts in May after remaining depressed for months, again fell in July. After rising by a marginal 0.9 per cent in June, it fell by 12.1 per cent.

The sector requires further support for improving of competitiveness in a difficult global market, with weak demand in China and Japan, said T S Bhasin, head of the Engineering Export Promotion Council.

Export of petroleum products continued to fall, by 21.8 per cent, higher than the 10.8 per cent fall in June. That of ready made textile goods fell nearly six per cent, after a marginal fall of 0.8 per cent in June. Gems and jewellery export, however rose by 8.8 per cent, after falling by 0.5 per cent in June.