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Exports dip 15 pc in July

New Delhi, Aug 14:  Hit hard by demand slowdown in the US and Europe, exports in July contracted 14.8 per cent - steepest fall in three years - to USD 22.4 billion, making it difficult
PTI August 14, 2012 20:29 IST
New Delhi, Aug 14:  Hit hard by demand slowdown in the US and Europe, exports in July contracted 14.8 per cent - steepest fall in three years - to USD 22.4 billion, making it difficult for the country to achieve the target of USD 350 billion this fiscal.

“The world trade contraction is getting worsened. The worst fear of European sovereign debt crisis is really impacting the world trade. In the US markets also, the appetite has substantially come down...Days coming ahead are tough,” Commerce Secretary S R Rao told reporters here. 

Reflecting slowdown in the economy, imports too declined by 7.61 per cent to USD 37.9 billion in July, leaving a trade deficit of USD 15.5 billion.

“Trade deficit has fallen but not very comfortably,” Director General of Foreign Trade (DGFT) Anup Pujari said.  During the April-July period of 2012-13, exports have shrunk by 5.06 per cent to USD 97.6 billion. Imports during the period dipped by 6.47 per cent to USD 153.2 billion. 

Earlier in the day, DGFT had said the cumulative exports figure for the four months was USD 80.44 billion.  Rao said due to the demand slowdown in the two biggest markets - the US and Europe, “it is a stiff challenge” to achieve the exports target of USD 350 billion set up for the current fiscal.

Asked whether the government is planning to provide more incentives to exporters, he said there is need to take more steps to reduce transactions cost of exporters to increase competitiveness of Indian goods in the global markets. 

He said that the recent steps like 24x7 working of customs and Electronic Bank Realisation of Cheques would help in substantially reducing the transactions cost.  

“We will have to reassess our tactical steps...several such steps would be taken...we need to focus on how to reduce transactions cost within our own economy,” he added. 

Last time when exports witnessed such a steep fall was in August 2009. They were down 23.5 per cent then.  Commenting on the trade data, Planning Commission Deputy Chairman Montek Singh Ahluwalia said the global economic situation is a cause of worry.

“The global economy is not looking very good. Prospects for Europe in current year is something like zero growth with negative in some countries. So I think, all countries including India are facing global environment that is not supportive. Trade deficit does pose challenge,” he said.

Trade deficit in April-July stood at USD 55.6 billion.  Rao said, meanwhile, the impact of global slowdown is clearly visible on China's exports as well. The growth rate in China's shipments have drastically come down to single digits from double, he added.

The exporting sectors which were showed negative growth during the first four months of this fiscal include engineering, iron ore and fruits and vegetables. 

Engineering exports, which contribute about one-fourth to the country's total exports, in July declined by 16 per cent, while during April-July, it was down by 9 per cent.  Similarly, petroleum exports in the month under review dipped by 19.4 per cent and 16.52 per cent during the first four months of this fiscal.

Petroleum imports too contracted by 5.52 per cent in July. However, it grew by 2.76 per cent in April-July 2012.  Petroleum exports declined because “the domestic demand has substantially increased because of poor monsoon”, Rao said.

Further, Pujari said that sectors like cotton yarn, leather, spices, marine products and tea have shown positive growth during the first four months of this fiscal. 

“Out of 26 exporting sectors, which were tracked by the Ministry, six have shown positive growth, 17 have shown mixed trends and three have shown negative growth consistently,” the DGFT said.

He added that in imports, the Ministry tracks 27 sectors.  “Out of this, only one sector (pulses) have consistently shown positive growth, four have shown negative growth and rest have shown mixed trends,” he said.