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Contracting for the fifth straight month, India’s exports slipped 10.21 per cent to $23.64 billion in July, on account of decline in the shipments of petroleum, leather and gems and jewellery items, according to the government data released on Friday.
However, the outward shipments in July recovered from a steeper decline of 60.28 per cent in April, 36.47 per cent in May, and 12.41 per cent in June.
The country’s imports too dipped 28.4 per cent to $28.47 billion in July, leaving a trade deficit of $4.83 billion, compared to a shortfall of $13.43 billion in the same month last year, as per the data.
In June, the country had reported its first trade surplus in over 18 years.
Oil imports declined by 31.97 per cent to $6.53 billion in the month under review. Gold imports grew by 4.17 per cent to $1.8 billion.
Major commodities that have recorded negative growth during July include petroleum products (-51.54 per cent), gems and jewellery (-49.61 per cent), leather (-26.96 per cent), man-made yarn/fabs/made-ups (-23.33 per cent), ready-made garments of all textiles (-22 per cent), and cashew (-21.25 per cent).
Sectors with positive growth during the month include rice, iron ore, oil seeds, oil meals, meat, dairy and poultry products, pharmaceuticals, coffee, engineering goods, and plastic.
Import segments that showed negative growth in July include machinery, electrical and non-electrical; chemicals and electronic goods.
During the April-July period, exports declined by 30.21 per cent to $74.96 billion, while imports fell 46.7 per cent to $88.91 billion. Trade deficit during the period stood at $13.95 billion.
Oil imports during the period dipped by 55.88 per cent to $19.61 billion. Non-oil imports declined by 43.36 per cent to $69.3 billion.
Commenting on the numbers, Indian Oilseeds and Produce Export Promotion Council (IOPEPC) Chairman Khushwant Jain said oilseed exports are recording growth on account of healthy output and steps taken by the government to promote shipments.
Farmers would get good prices due to an increase in exports and they should not worry about the impact of expected bumper crops on prices, he added.
Federation of Indian Exports Organisations (FIEO) President Sharad Kumar Saraf said that July figures have reflected continuous arrest in the decline of exports.
All this has been possible because of the start of business activities across the country and business/order enquiries from almost all major economies like the US, EU, Canada, Japan, South Korea, Australia and New Zealand which helped in bringing the exports sector to almost 90 per cent of the level in July 2019, Saraf said.
However, he added that “the global revival and business sentiments still have not picked up, impacting the global supply chain. The focus should be on free trade agreements and more of multi-lateral agreements to further revive our exports and take up competition coming from smaller countries like Vietnam, Bangladesh and Taiwan”.
Aditi Nayar, Principal Economist, ICRA Ltd, said that this trend of recovery in exports is likely to strengthen in the coming months, as demand for non-oil, non-gold imports start to normalise, gold imports gather steam around the festive/marriage months, and crude oil demand and prices stabilise at a moderate level.
India’s service sector exports dipped by 8.39 per cent to $17 billion, RBI data showed Friday.
Services payments or imports in June too declined by 15.29 per cent to $9.96 billion.