India’s merchandise exports shrank more than 20 per cent in August to $21.27 billion, the ninth straight monthly decline.
Imports fell 9.95 percent from a year earlier to $33.74 billion, on the back of both declining global commodity prices and weak domestic demand, according to official data released on Tuesday. Gold imports, however, shot up by more than 140 per cent to $4.95 billion from $ 2.06 billion in August 2014.
The trade deficit marginally narrowed to $12.5 billion from $12.8 billion in July, mainly due to lower oil imports. The deficit was $10.6 billion in August 2014.
Sharp declines in exports were reported by sectors including petroleum (48 per cent), engineering (29 per cent), carpets (22 per cent), marine products (21 per cent) and leather and leather goods (13 per cent).
Oil imports were almost 43 per cent lower at $7.36 billion.
The government needs to intervene at the highest level to address the contraction in exports, Federation of Indian Export Organisations President S C Ralhan said in a statement.
“The trade data released today for August shows that the fall in exports is becoming sharper month-on-month, signalling worsening of the global market conditions,” Engineering Export Promotion Council of India Chairman Anupam Shah said in a statement. “The situation has deteriorated further” due to the troubles in China.
During the first five months of the current financial year, imports have shrunk 11.6 per cent to $ 168.6 billion and exports have declined 16.2 percent to $ 111.1 billion. The trade deficit for the period stands at $57.5 billion.
In 2014-15, India’s exports at $310 billion had fallen short of the government’s target of $340 billion.
All eyes are now on Reserve Bank Governor Raghuram Rajan, who has lowered policy rates by 75 basis points since January, and is widely expected to announce further cuts at the policy review scheduled for September 29 after official data released on Monday showed wholesale price inflation at a record low.
