SME Times News Bureau | 16 Oct, 2019
Merchandise exports from the country declined
in September for the third time in the current financial year, while imports
dropped for the fourth consecutive month.
Data released by the Commerce Ministry showed India's merchandise exports
declined 6.57 per cent to $26.03 billion in September 2019 from $27.87 billion
in September 2018 while imports in the month dropped 13.85 per cent to $36.89
billion from $42.82 billion in September 2018.
The latest figures signal rising
protectionism and continuing trade tensions between the US and China along with
the spectre of a global slowdown are impacting India's trade prospects as well
Despite the overall sluggish export performance, sectors such as electronic
goods, spices, minerals and ores, ceramic products, drug and pharmaceuticals
recorded positive growth in September.
Shipments of gems and jewellery, engineering goods, petroleum products,
handloom and leather goods, cereals, meat and dairy products recorded negative
growth, according to the data.
"Declining trend in exports does not augur well for the overall growth of
the economy. Escalating trade tensions that have unsettled the slowing world
economy have also led WTO to sharply cut their trade forecasts for both 2019
and 2020 to 1.2 and 2.7 respectively. The downside risks still remain high in
the global economy and the projection for 2020 depends on a return to more
normal trade relations," said FIEO President Sharad Kumar Saraf.
The problem for India's exports has assumed serious proportions as only eight
out of 30 major product groups showed positive growth in September 2019. All
major sectors including almost all labour-intensive sector of exports besides
petroleum were in the negative, showing such a decelerating trend.
"Exports continue to remain amongst the weakest links of the economy. The
situation is aggravated by worsening global trade, making it essential for the
government to intervene effectively to make Indian exports competitive. Rising
raw material prices and lack of low cost credit need to be tackled," said
EEPC India Chairman Ravi Sehgal.
As per the Commerce Ministry data, amidst the sluggish trade performance in the
month of September, the country's trade deficit shrunk during the month under
review to $10.86 billion dollars from $14.95 billion in the year ago period.
The drop has largely been on account of sharp fall in imports relative to
exports.
Imports during September showed negative growth in almost all major sectors
including coal, petroleum products, crude precious and semi-precious stones,
chemicals and electronic goods. Oil imports in September were $8.98 billion, which
was 18.33 per cent lower, compared to $10.99 bn in corresponding period last
year.
The third monthly fall in exports this year (FY20) has meant that cumulative
value of exports for the period April-September 2019-20 also fell by 2.39 per
cent to $159.57 billion as against $163.48 billion during April-September
2018-19.
The fall in exports for India has come at a time when Indian economy has slowed
to 5 per cent level in the first quarter of FY20 and indications are that it
will fall further despite government efforts to pump prime the economy through
a series of stimulus measures. All major global institutions have brought down
India's growth projections. What is more worrisome that even the world economy
is slowing down. The latest IMF projections put world to grow at 3 per cent in
2019 lower from its earlier projection of 3.2 per cent and a lot lower that
2018 growth of 3.6 per cent.