Exports contract 10 pc in Aug on global economic slowdown

Besides, reflecting slowdown in the domestic economy, imports, too, dipped by 5.08 per cent to USD 38 billion, from USD 40 billion in August 2011, resulting in a trade deficit of USD 15.7 billion for the month.

The decline in the country's shipments comes amid India's economic growth slipping to nine-year low of 6.5 per cent in 2011-12, and subdued industrial output in the first two months of the current fiscal.

However, Commerce Secretary S R Rao said the decline in August is lower than that of the previous month, when the exports contracted by 15 per cent.

"Compared to our export performance in July, there is a slight ray of hope. There is a slight improvement in August. I hope this will give us some confidence that we can make up," Rao told reporters here.

He said the incentives announced in the foreign trade policy (FTP) was the reason for this. The government had extended 2 per cent interest subsidy to exports in the policy besides other benefits.

"There is a slight ray of hope that is coming after dramatic fall in July. Reason is that, the FTP incentives that are being announced perhaps are playing out and yielding fruits," he added.

In April-August, too, the shipment dipped by about six per cent to USD 120 billion from USD 127.6 billion in the same period last year.

During the first five months of the fiscal, imports contracted by 6.2 per cent to USD 191.1 billion. Trade deficit during the period stood at USD 71.1 billion. (MORE)