CRISIL said in a note that while the large drop could be partly attributed to a high base effect, given the unexpected spike in exports in the same month of last year, exports fell consistently and on a seasonally adjusted basis.
Furthermore, unlike recent months when falling oil exports – one of India’s top exports – was the main cause of the overall drop in exports, June also saw a sharper drop in core (non-oil, non-gold) exports.
CRISIL says headwinds of slowing global growth are starting to affect India’s trade on all fronts. Commodity exports fell 22% year-on-year (YoY) in June to $32.9 billion — the fifth consecutive month of decline. Merchandise imports fell 17.5% year-on-year to $53.1 billion, while core imports fell 14.5 percent to $33.3 billion in June.
CRISIL noted that the drop in India’s exports reflected a similar slowdown from the broader Asia region, showing a decline in demand for goods from advanced economies, where the focus has shifted to service consumption.
While falling commodity prices played a large role in the drop in the dollar value of India’s exports, volumes also fell in many cases.
In the April-June quarter of this year, India’s merchandise exports fell 15.1% year-on-year compared with an average decline of 2% in the previous two quarters.
Imports of goods in June also fell sharply. Overall merchandise imports fell 17.5% year-on-year to $53.1 billion, while core imports fell 14.5 percent to $33.3 billion for the month.
With imports plummeting, the goods trade deficit narrowed slightly to $20.1 billion in June, from $22.1 billion in the previous month and the same period last year.
Fiber2Fashion (DS) News Desk
