India’s merchandise exports down by 9.71 per cent in June

India’s merchandise exports in June declined 9.71 per cent, on a year-on-year basis, to $25.01 billion from $27.70 billion reported for the corresponding month of last year, official data showed.

As per the data furnished by the Ministry of Commerce and Industry, non-petroleum and non-gems and jewellery exports in June 2019 were $19.15 billion from $20.13 billion in June 2018, exhibiting a negative growth of 4.86 per cent.

“Cumulative value of exports for the period April-June 2019-20 was $81.08 billion as against $82.47 billion during the period April-June 2018-19, registering a negative growth of 1.69 per cent in dollar terms,” the ministry said.

On the other hand, imports declined by 9.06 per cent to $40.29 billion in June from $44.30 billion reported for the corresponding month of 2018.

Oil imports in June were $11.03 billion, which was 13.33 per cent lower, compared to $12.73 billion in June 2018.

“Non-oil imports in June 2019 were estimated at $29.26 billion which was 7.34 per cent lower in dollar terms, compared to $31.58 billion in June 2018,” the ministry said.

“Non-oil and non-gold imports were $26.57 billion in June 2019, recording a negative growth of 9 per cent, as compared to non-oil and non-gold imports of $29.19 billion in June 2018.”

However, the trade deficit during the month under review narrowed to $15.28 billion as against the deficit of $16.60 billion in June 2018.

“Sharp drop in exports for June calls for an immediate intervention by government to help exporters in terms of competitiveness and dealing with trade barriers in world trade,” said EEPC (Engineering Export Promotion Council) India Chairman Ravi Sehgal.

Aditi Nayar, Principal Economist, ICRA, said: “Although the contraction in merchandise imports and exports in June 2019 came as a surprise, the merchandise trade deficit nevertheless printed largely in line with expectations.

Lower crude oil prices explain a portion of the YoY contraction in the absolute level of exports and imports, as well as in the size of the merchandise trade deficit to $15.3 billion in June 2019 from $16.6 billion in June 2018.”

“Nevertheless, the YoY contraction in imports of items such as transport equipment, machinery and fertilisers should be viewed with caution, as they suggest that the underlying demand dynamics are weak.”

Meanwhile India’s factory output growth eased in May 2019 as it rose by 3.1 per cent from a revised growth of 4.32 per cent reported for April 2019, official data showed on Friday.

Even on a year-on-year (YoY) basis, May’s industrial production growth of 3.1 per cent was lower than the 3.8 per cent achieved during the corresponding month of the previous fiscal.

“The cumulative growth for the April-May 2019 period over the corresponding period of the previous year stands at 3.7 per cent,” the Ministry of Statistics & Programme Implementation said in ‘Quick Estimates of Index of Industrial Production’ (IIP).

Meanwhile, higher food prices accelerated India’s June retail inflation to 3.18 per cent from 3.05 per cent in May, official data showed on Friday. However, on a year-on-year (YoY) basis, the Consumer Price Index (CPI) in June 2019 was lower than the corresponding period of last year when retail inflation stood at 4.92 per cent.

According to the data furnished by the National Statistical Office (NSO), the Consumer Food Price Index (CFPI) inflated to 2.17 per cent during the month under review from an expansion of 1.83 per cent in May 2019.

Separately, India’s strong diesel demand growth is decoupling from the car market as motorists increasingly turn to gasoline vehicles, leaving it more reliant on patchy demand from construction and heavy industry.

A slowdown in demand growth in India — one of Asia’s biggest diesel guzzlers — could add to a persistent glut of diesel in the region, fuelled in part by strong exports from China, and put pressure on regional refining profit margins.

Transportation has historically accounted for two-thirds of India’s diesel use, but a steady decline in diesel’s discount to gasoline has seen sales of diesel-powered cars fall to a record low share of total sales, according to industry body Society of Indian Automobile Manufacturers (SIAM).

Agencies