Current Affairs 2015: Exports dropped by 20.7% in August 2015

India’s exports fell for the nine straight months by 20.7 per cent to $21.27 billion in August as a relatively firm rupee and global slump slashed demand for merchandise.

The data revealed that gold imports increased to $4.95 billion in the month under review from $ 2.06 billion in August a year ago.

According to Commerce Ministry data, imports declined nearly 10 per cent in August, to 33.7 billion dollars.

As a result, trade deficit has narrowed by 2.61 percent in August to United States dollars 12.48 billion from USD 12.81 billion in the previous month. In April-August, non-oil exports fell by 7.47%.

“The Prime Minister and the commerce and industry minister should intervene in the matter”.

Nayar said the fall in non-oil, non-gold imports limits the vulnerability related to the size of the current account deficit, which is expected to shrink in 2015-16 relative to 2014-15.

In 2014-15, India’s exports at $310 billion had fallen short of the government’s target of $340 billion.

“We are in for a tough time, making it imperative for the government to work with the exporting community to sail through the hard waters of global trade”, he added.

Slowing exports have become a drag on growth, contributing to a contraction in the April-June quarter despite the boost to the overall trade balance from lower prices for imported oil and gas. The main exporting sectors which reported decline in exports include petroleum products (fall of 47.88 per cent), engineering (29 per cent), leather and leather goods (12.78 per cent), marine products (20.83 per cent) and carpet (22 per cent). “Falling exports are a worrying sign and if this trend continues there could be job losses in many sectors”, said Ajay Sahai, director general and CEO, Federation of Indian Export Organisations (FIEO).

The declining exports underscore the difficulties India’s economy faces as it tries to strengthen a recovery.