Exports contract 0.3% to $21.51 billion in August

Imports too declined by 14.09 per cent to $29.19 billion

Merchandise exports fell for the second consecutive month in August, going down by a marginal 0.3 per cent.

Exports fell to $21.51 billion in August, against $21.58 billion in the corresponding period last year, government data showed on Thursday. In the month of July, exports had contracted 6.84 per cent, to $21.68 billion.

Cumulative exports for the AprilAugust period of FY17 stood at $108.51 billion, compared with $111.85 billion for the corresponding period in FY16. Imports also declined by 14.09 per cent to $29.19 billion in August, compared with the year-ago period, when it was $33.98 billion. Cumulative imports in the current financial year reached $143.18 billion, compared with $170.23 billion in the previous year.

Exports had contracted for 19 consecutive months till May this year, before rising marginally by 1.27 per cent in June. Compared to this, during the 2008-09 global financial meltdown, the decline was for nine months in a row. In the last financial year (2015-16), total exports had stood at $261 billion. This was a 15.85 per cent decline from the over $310 billion worth of trade conducted by the country in the year before. While the government had targeted $300 billion of exports, the figure had to be revised downwards to $260-270 billion after merchandise trade remained negative throughout the last financial year.

The fall in exports had reached its lowest possible levels and would start growing soon, commerce ministry sources said.

Besides a global slowdown, the severe fall is attributed to global factors such as a decline in commodity prices and sluggishness in the Chinese economy, among others. Among major export items, outbound trade fell for 16 items, against 22 items in July.

Export of engineering goods made a comeback in the growth charts in August, rising 4.21 per cent after remaining depressed for months. It had fallen by 12.11 per cent in July. Also, the fall in exports of drugs and pharmaceuticals, which had been mellowing in recent months, finally gave way to growth in August. It rose 0.67 per cent in August after a 0.07 per cent fall in the previous month.

On the other hand, petroleum products continued to fall by 14.08 per cent, albeit lower than the 21.78 per cent fall seen in July. Exports of major exchange earners like readymade textile goods and gems and jewellery also rose by 3.72 and 7.58 per cent, respectively. While textiles had fallen by nearly six per cent in June, gems and jewellery had risen by 8.80 per cent.

“Non-oil exports recorded a small rise on a y-o-y basis in August 2016, led by items such as gems & jewellery, iron ore and engineering goods, although the sustainability of this trend remains to be seen.” Aditi Nayar, senior economist at ICRA said. More on business-standard.com