With the slowdown in the U.S., eurozone, China and Japan continuing, Indian exports have come under tremendous pressure for the second consecutive month with shipments declining by 5.45 per cent in June to $25 billion.
Handicrafts, jute, tea and cashew accompanied by coffee were some of the items hit by the decline in exports. Similarly, imports also witnessed a sharp fall of 13.46 per cent at $35.37 billion against $40.8 billion in June 2011, resulting in a narrowing of the trade deficit to $10.3 billion for the month.
The decline in the country’s shipments comes amid India’s economic growth slipping to a nine-year low of 6.5 per cent in 2011-12, and subdued industrial output in the first two months of the current fiscal. “The contraction in global demand and deceleration in manufacturing are primary reasons for decline in exports,” President of the Federation of Indian Export Organisations (FIEO), Rafique Ahmed, said in a statement here.
According to official data released by the Commerce Ministry, exports during the April-June quarter of 2012-13 dipped by 1.7 per cent to $75.2 billion, from $76.5 billion in the same period last fiscal.
Commerce Secretary S. R. Rao has already stated that markets in the eurozone, the U.S., China and Japan are still not showing healthy growth, and these are indications of global recession.
For instance, imports during the first quarter of this fiscal dipped by 6.10 per cent to $115.25 billion from $122.74 billion in the April-June period of last fiscal. Trade deficit during the quarter stood at $40 billion. Top exporting commodities during the April-June quarter included rice, which increased by 104 per cent, iron ore (40 per cent), oil meal (38 per cent) and spices (35 per cent).
In value terms, exports of petroleum products ($12.9 billion), engineering goods ($14.6 billion), gems and jewellery ($10 billion) and pharmaceutical and readymade garments, too, showed strong growth. Imports of petroleum products touched $41.5 billion during April-June 2012. Other importing sectors which registered growth include gems and silver ($9.4 billion), machinery ($8.5 billion) and electronics ($7.1 billion).