Indian imports declined by $39.58 billion in August.
Sluggish global demand pulled India’s merchandise exports lower by 6.05 per cent in August on a year-on-year basis. As per the data furnished by the Ministry of Commerce & Industry, August exports went down to $26.13 billion from $27.81 billion reported for the corresponding period of the previous year.
However, on a sequential basis, exports during the month under review was marginally lower from $26.33 billion worth of merchandises that were shipped out in July 2019.
“Non-petroleum and non-gems and jewellery exports in August 2019 were $19.60 billion, as compared to $20.76 billion in August 2018, exhibiting a negative growth of 5.61 per cent,” the ministry said in a statement.
On the other hand, imports declined by 13.45 per cent to $39.58 billion in August from $45.73 billion reported for the corresponding month of 2018.
“Oil imports in August 2019 were $10.88 billion, which was 8.90 per cent lower in dollar terms, compared to $11.94 billion in August 2018,” the ministry said.
“Non-oil imports in August 2019 were estimated at $28.71 billion, which was 15.05 per cent lower in dollar terms, compared to $33.79 billion in August 2018,” it added.
According to the ministry data, non-oil and non-gold imports declined by 9.33 per cent to $27.34 billion in August 2019 from $30.15 billion in August 2018.
Consequently, the trade deficit in August narrowed to $13.45 billion as against the deficit of $17.92 billion in the corresponding period of 2018.
“A sharp contraction in gold as well as non-oil, non-gold merchandise imports led to considerable shrinking of merchandise trade deficit in August 2019. The de-growth in gold imports is unsurprising in the light of the recent spike in prices of the precious metal, which has contributed to the contraction in imports of stones and precious metals as well. Such imports may revive to some extent in the festive season,” said Aditi Nayar, Principal economist, ICRA.
“The decline in non-oil, non gold imports in August, led by sectors such as transport equipment, machinery, coal and chemicals, provides a cautionary signal regarding the strength of underlying economic activity,” Nayar added.
According to Sharad Kumar Saraf, President, FIEO, contraction in exports is a reflection of uncertainties, sluggish global demand and rising tariff war.
“The softening of crude, steel and other commodities prices also pulled down exports. Only 8 out of 30 major product groups were in positive territory during August 2019. Rest all major sectors of exports, including almost all labour-intensive sectors of exports besides petroleum, were in the negative showing such a decelerating trend,” Saraf was quoted as saying in a statement.
“The slowdown in chemical and plastics exports are particularly worrisome as we were growing in these sectors.”
Meanwhile India’s merchandise exports rose 2.25 per cent in July on a year-on-year basis to $26.33 billion from $25.75 billion reported for the corresponding month of the previous year.
As per the data furnished by the Ministry of Commerce and Industry, ‘electronic goods’, ‘drugs and pharmaceuticals’, ‘organic and inorganic chemicals’ and ‘marine products’ showed high export growth during the month under review.
“Non-petroleum and non-gems and jewellery exports in July 2019 were $19.70 billion, as compared to $18.72 billion in July 2018, exhibiting a positive growth of 5.28 per cent,” the ministry said. On the other hand, imports declined by 10.43 per cent to $39.76 billion in July from $44.39 billion reported for the corresponding month of 2018.
“Oil imports in July 2019 were $9.60 billion, which was 22.15 per cent lower in dollar terms (22.02 per cent lower in rupee terms), compared to $12.33 billion (Rs84,707.59 crore) in July 2018,” the ministry said.
“Non-oil imports in July 2019 were estimated at $30.16 billion (Rs2,07,522.94 crore), which was 5.92 per cent lower in dollar terms (5.76 per cent lower in rupee terms), compared to $32.06 billion (Rs2,20,209.17 crore) in July 2018.”
Besides, the ministry data showed that non-oil and non-gold imports declined by 2.22 per cent to $28.45 billion from $29.09 billion in July 2018.
Consequently, the trade deficit in July narrowed to $13.43 billion as against the deficit of $18.63 billion in the corresponding period of 2018.
“Consumer durable and consumer non-durable goods like electronic goods, pharma, marine and textiles have outperformed the overall export growth of 2.25 per cent for the month of July 2019,” said Trade Promotion Council of India Chairman Mohit Singla.
Indo-Asian News Service