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This was the second consecutive month of single-digit growth in exports, prompting exporters to demand the government announce incentives for them in its coming foreign trade policy.
Falling crude oil prices also hit imports, which rose at a three-month low of 2.08 per cent — from $37.02 billion in August 2013 to $37.79 billion in the corresponding month this year. As such, the trade deficit for August this year stood at $10.83 billion, 1.4 per cent more than the $10.68 billion recorded in the year-ago period.
In August, import of crude and petroleum products declined 14.97 per cent to $12.83 billion from $15.1 billion in the corresponding period last year. Global crude prices stood at about $100 a barrel in August, against $107-108 a barrel a year earlier.
Gold import rose 175 per cent year-on-year to $2.03 billion.
Non-gold, non-oil imports, an indicator of industrial growth, rose about eight per cent, led by items such as electronic goods, iron & steel and metals. This trend indicated a nascent revival in economic activity, after the Index of Industrial Production fell to 0.5 per cent in July, the lowest this financial year, said a note by Icra.
In August, import of electronic goods rose 14.56 per cent year-on-year to $3.3 billion, while that of iron & steel increased 26.6 per cent to $1.46 per cent.
For the first five months of this financial year, exports rose 7.31 per cent to $134.79 billion from $12.56 billion in the year-ago period, while imports fell 2.69 per cent — from $196.22 billion to $190.94 billion. As a result, trade deficit for April-August fell to $56.15 billion from $70.6 billion in the year-ago period.
According to the Federation of Indian Exporters Organisations (FIEO), the low growth in exports resulted from a weak and non-uniform global recovery. “While the US and emerging economies are posting good results, Europe has again fallen into contraction. Another reason might be the less spectacular growth in petroleum exports, largely on account of softening crude prices, which has helped us manage imports and the trade deficit,” said FIEO President M Rafeeque Ahmed.
He urged the government to immediately reintroduce interest subvention on exports with effect from April this year, as uncertainty had hit micro, small and medium exporters. He added the new FTP should focus on marketing, branding, e-commerce project exports and high-technology exports, besides setting a five-year target for exports.
