Exports from India are still not out of the woods, with as many as 23 key sectors, including petroleum, engineering and leather, declining in August mainly due to a fall in global prices and a demand downturn.
In all, 23 out of 30 sectors closely monitored by the Commerce Ministry were in the negative zone last month, according to ministry data. This has prompted exporters’ body FIEO to seek immediate intervention of the government to arrest the decline.
India’s exports declined 20.66 per cent in August to $ 21.26 billion, pushing up the trade deficit to $ 12.47 billion. “A consultation meeting should be held with export bodies and leading exporters to draw a road map for exports in such a challenging time in which reaching last year’s export figure looks difficult,” Federation of Indian Export Organisations President S .C. Ralhan said.
He saw a drop in oil prices, subdued demand and other domestic factors as responsible for the current state of affairs.
During the month, top two sectors - engineering and petroleum products - contracted 29 per cent and 47.88 per cent, respectively. Textiles exports too shrank by about 7.32 per cent to $ 1.28 billion in August.
These three sectors make up about 47 per cent of the country’s total exports in 2014-15, when it stood at $ 310.5 billion.
Agri-products, which constitute over 10 per cent of the country’s total shipments, too recorded a negative growth during the month under review. Overall, 11 out of 13 main agriculture products slipped into negative territory.
Exports of rice, spices and tobacco fell 26.32 per cent to $ 443 million, 8.7 per cent to $ 209 million and 15.25 per cent to $ 62 million, respectively.
Other products that have reported a negative growth include cereals (43.94 per cent), cashew (7.75 per cent), oil meals (19.5 per cent), carpet (22 per cent), leather (12.78 per cent), iron ore (34.28 per cent) and chemicals (5 per cent).
Decline in these exports has been instrumental in dragging down India’s overall merchandise exports.
To push exports, the Commerce Ministry is asking exporters to explore new markets and ship value—added products. It’s also involving states for a turnaround.
India has aimed at taking exports of goods and services to $ 900 billion by 2020 and raising the country’s share in world exports to 3.5 per cent from 2 per cent.
The exports in the past four financial years have been hovering at around $ 300 billion.
The continuous decline in exports is expected to impact jobs and put pressure on the current account deficit.
