JOIN USIndia's exports see sixth straight fall; traders cry
India’s trade deficit narrowed in the month of May, but exports took a hit for the sixth consecutive month, prompting exporters to demand some fast action from the government to arrest the slide in overseas shipment.
Trade deficit in the month of May stood at $10.41 billion or at a three-month low, helped by a lower import of gold. India imported $2.42 billion worth of gold in May, against $3.13 billion in April.
Experts said that slower import of gold is expected to reflect positively on India’s current account balance in the coming months. But falling exports, despite a weak rupee, was a worrying sign and would impact production from factories in the times ahead.
Exports fell 20.19 per cent in May to $22.34 billion due to demand contraction in the global market and fall in crude prices that impacted India’s export of petroleum products.
Apart from petroleum products, other exports that took a hit in May were gems and jewellery, engineering, and chemicals.
“Fall in exports is becoming a trend, and it is really worrying,” said Anupam Shah, Chairman of the Engineering Export Promotion Council (EEPC).
He demanded stimulus in the form of interest subvention, a technology upgradation fund, and refund of local taxes.
“It is a matter of serious concern as the decline has further exasperated. This, if allowed to continue, will severely impact the Indian economy,” Federation of Indian Export Organisations (FIEO) President S C Ralhan said.
Ralhan said that Indian exporters are also losing out their competitiveness due to high logistics cost and ground level transaction costs.
Merchandise imports in May witnessed the steepest fall of 16.52 per cent. The last time when imports had fallen so steeply was in February 2014, during which imports had contracted close to 18 per cent.