India’s merchandise exports resumed their declining trend in July after a marginal rise in June as Brexit and slowing global growth pulled down shipments. July exports were down 6.8% to $21.6 billion while the decline in imports was sharper at 19% to $29.4 billion, data released by the commerce department on Friday showed.Trade deficit in the month narrowed to $7.76 billion from $8.1 billion in June.
“As feared, the y-o-y rise in merchandise exports, both aggregate and non-oil, has proved to be shortlived with widespread y-o-y degrowth in July 2016,” said Aditi Nayar, Senior Economist, ICRABSE -0.44 %.”The decline in export reflect the contraction in global trade and leading exporting countries like China also witnessed similar decline in the month of July, 2016. President FIEO said that global trade uncertainties are increasing and Brexit has further compounded the same,” said S C Ralhan, President, Federation of Indian Export Organisations. China’s exports fell 4.4% in July and imports declined 12.5%.As many as 23 of the 30 exporting sectors reported negative growth. Ralhan said that the decline in exports of engineering goods, leather and textiles is major concern as these are highemployment intensive sectors of exports.
The government has set a target of increasing India’s exports to $900 billion by 2018-19 and expanding the country’s share of global exports to more than 3%.SHARP FALL IN IMPORT Non-petroleum imports contracted 15.8% to $22.6 billion while oil imports shrank 28% to $6.8 billion. The decline in imports was also partly due to a 63% dip in gold imports to $1.07 billion.