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4% fall in exports adds to India's economic woes
Publication Date : 15-06-2012
Adding woes to the already sluggish economy, India's exports declined by 4.16 per cent to US$25.68 billion in May due to unabated slump in global demand and slowdown in domestic industrial growth.
Imports dropped by a sharper pace of 7.36 per cent to $41.9 billion, signalling weakening of the economy especially with regard to fresh investments as inward shipments of plant and machinery fell by eight per cent, according to provisional data released yesterday.
The trade deficit also narrowed to $16.3 billion during May, from $18.5 billion a year ago. “We have also seen the index of industrial production numbers. So you can correlate the reasons why exports have not done too well...,” commerce secretary, SR Rao said.
In the backdrop of an ambitious 20 per cent growth target in exports for the current fiscal, announced in the recently released foreign trade policy, the commerce ministry is “re-calibrating its strategy” to find out a solution, he said.
Dismal export performance comes on the heels of disappointing industrial output that showed a mere 0.1 per cent expansion in April.
Contraction of demand in India's traditional markets, particularly in Eurozone economies, is hurting exports, Rao said, adding that “(We are) still not out of the woods... bailing out of Greece and Spain is still work in progress”.
Decline in exports in May were particularly witnessed in top exporting commodities such as petroleum products (-26.07 per cent), engineering goods (-15.67 per cent), gems and jewellery (-9 per cent) and readymade garments (-15.82 per cent).
On the import front, gold and silver was down by about 51 per cent, while plant and machinery dropped eight per cent. However, imports of crude oil were up 14 per cent.
Cumulatively, the imports have come down 2.42 per cent in the first two months of 2012-13 to $79.8 billion. - With reports from PTI