News and Events

Severe sluggishness in demand led to India’s merchandise exports falling 14.8 per cent to $22.4 billion in July, compared with $26.3 billion in the corresponding period last year. This was the steepest fall in exports in 35 months, after the decline of 23.59 per cent in August 2009.

 

Imports fell 7.78 per cent to $37.9 billion, against $41.1 billion in July 2011, according to figures released by the Department of Commerce on Tuesday.

 

This financial year, this was the third consecutive month that saw declines in both exports and imports.

 

Mirroring the gloomy demand scenario across the world, exports in April-July declined 5.05 per cent to $97.6 billion, compared with $102.8 billion in the corresponding period last year, while cumulative imports fell 6.47 per cent to $153.2 billion, compared with $163.8 billion in the year-ago period.

 

The numbers initially released on Tuesday had some discrepancies. Subsequently, the Department of Commerce issued a release that revised total exports from $80.44 billion to $97.6 billion.

 

Earlier, the commerce ministry had over-estimated export figures by $9.4 billion from April-October from April-October 2011-12.

 

“July numbers are a cause of concern. Don't expect solutions in two hours. We are seriously concerned because of the slowdown. The numbers have been depressing. We are anticipating a contraction. The concerns of exporters have been flagged. There will be monthly trade facilitation meetings between commerce secretary, DGFT, regional DGFT offices and export councils. We hope there will be a turnaround by the month of October. By the time we enter October, we hope that we will be able to bring about a positive improvement and enter a strong positive territory," Commerce Minister Anand Sharma said after a review meeting with industry bodies and export promotion councils on Tuesday.

 

Commerce Secretary S R Rao said Europe’s crisis was affecting India’s trade, adding the global outlook was contributing to woes. The department was likely to take steps to boost shipments, he said. “World trade contraction is worsening… Fears of a European sovereign debt crisis is really impacting world trade. In the US market, too, the appetite has substantially reduced. The days ahead would be tough….We are going to face a stiff challenge to meet the export target,” Rao said.

 

The fall in trade deficit, too, failed to bring cheer. In fact, the trade deficit rose to $15.5 billion, compared with $14.8 billion a year ago. Cumulatively, it stood at $55.6 billion in the April-July period, against $61 billion in the corresponding period last year. “Trade deficit (cumulatively) has fallen, but not very comfortably,” said Director General of Foreign Trade Anup Pujari.

 

Exporters have been awaiting measures in the recently-announced Foreign Trade Policy to kick in. They were also confident of meeting the export target of $350 billion. However, after the trade data was released on Tuesday, they sought an export development fund with a corpus of 0.5 per cent of the free-on-board value to enable micro, small and medium enterprises to aggressively enter unexplored markets.

 

“The situation is indeed worrisome. The problem is now severe. Coupled with the demand slowdown in international markets, domestic manufacturing growth has also been extremely discouraging. Coming back to the positive trajectory now looks difficult,” said K T Chacko, director, Indian Institute of Foreign Trade