In August, several export sectors experienced a decline in growth, with negative performance observed in industries such as tea, coffee, rice, spices, leather, gems and jewelry, textiles, and petroleum products. On a positive note, 15 out of the 30 key sectors managed to achieve growth during this period.
Merchandise exports faced their seventh consecutive monthly decline in August, with total exports amounting to $34.48 billion. This marked a significant decrease of 6.86 percent compared to the same period last year. The primary contributing factors to this decline were the subdued global demand for products in the petroleum and gems and jewelry sectors.
According to data released by the Ministry of Commerce and Industry on Friday, imports also experienced a ninth consecutive monthly decline, decreasing by 5.23 percent to reach $58.64 billion. Consequently, the trade deficit, which represents the difference between exports and imports, reached $24.16 billion in August, marking its highest level in ten months.
If we exclude gems and jewelry as well as petroleum, exports in August amounted to $26 billion, in comparison to $25.02 billion from the previous year. When looking at the cumulative data for the April-August period, exports showed a contraction of 11.9 percent, totaling $172.95 billion. Imports during the same five-month period dropped by 12 percent, reaching $271.83 billion. As a result, the trade deficit narrowed to $98.88 billion, down from $112.85 billion during the April-August period in 2022.
Sunil Barthwal, the Commerce Secretary, remarked that there are signs of improvement and a stabilizing situation. In July, India's exports had contracted by 15.88 percent, and he noted that until that point, there was a prevailing pessimism. However, he pointed out that now there are noticeable signs of improvement, indicating a better global situation. He also highlighted that the trade deficit, which has been a longstanding concern, is showing favorable figures in August. This development is a reassuring factor for the economy, according to Barthwal.
Nevertheless, the official expressed concerns about the escalating interest rates in Europe, which could potentially affect their manufacturing sector and, subsequently, the demand for Indian goods. Additionally, he noted that the increasing prices of crude oil and other commodities could lead to an uptick in the value of exports.
In August, several export sectors experienced a decline in growth, encompassing tea, coffee, rice, spices, leather, gems and jewelry, textiles, and petroleum products. Conversely, out of the 30 key sectors, 15 of them managed to achieve positive growth during the same period.
On the import side of things, oil shipments in August witnessed a substantial decrease of 23.76 percent, amounting to $13.2 billion. In contrast, gold imports during August saw a notable increase, rising by 38.75 percent to reach $4.93 billion. Additionally, the export of electronic goods showed a robust growth of 26.29 percent in August, totaling $2.17 billion. Over the cumulative April to August period, electronic goods exports experienced a substantial 35.22 percent increase, reaching $11.18 billion.
In the realm of services, the estimated value of services exports in August stood at $26.39 billion, compared to $26.5 billion the previous year. Concurrently, services imports amounted to $13.86 billion in August, down from $15.22 billion in the corresponding period.
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