JOIN USExports fall 10% in Aug to $22.3 b
A poor show by the manufacturing sector and global economic headwinds affected India’s merchandise exports in August, which fell at a sharper pace than imports, widening the trade deficit marginally to $15.6 billion from July’s $15.5 billion.
According to the quick estimates released by the Ministry of Commerce and Industry, exports fell 9.7 per cent from a year earlier to $22.3 billion, while imports dropped 5.08 per cent to $37.9 billion.
The fall in exports for the fourth consecutive month raised doubts about the government achieving the $360 billion export target this fiscal year.
Although there was no official reason given for the fall in exports, analysts said contraction in global demand and deceleration in the manufacturing sector may have affected the shipments. While the US economy has shown little growth, the situation prevailing across Europe is far from satisfactory, thus affecting demand in emerging economies. A corresponding sluggishness in the domestic economy, on the other hand, has reflected on imports taking a hit.
However, oil imports in August rose close to 3 per cent and stood at $12.8 billion, but there was a drop of nearly 9 per cent in non-oil imports at $25 billion.
Total exports since April fell 5.96 per cent to $119.9 billion, while imports were down 6.2 per cent to $191.1 billion.
The government is, however, hopeful that the export scenario will change from next month, with Commerce and Industry Minister Anand Sharma recently saying that there will be a rebound in India’s shipments from October, as steps taken by EU and the US are likely to yield results.
Meanwhile, the monthly Purchasing Managers’ Index by HSBC that came in at 52.8 or higher than 50-point level that separates expansion from contraction, pointed towards manufacturing activity in Indian factories holding steady in September, raising hopes of a gradual recovery in the manufacturing sector.
The extension of 2 per cent interest subsidy given to the exporters and other benefits is also expected to impact India’s trade vis-a-vis other countries in the coming months.