Global headwinds start buffeting India's trade on all sides: CRISIL

While the large decline could be attributed partly to a high base effect, as exports had unexpectedly shot up in the same month last year, exports declined sequentially and on a seasonally-adjusted basis too, CRISIL said in a note.

Moreover, unlike in recent months when the fall in export of oil—one of India’s top export commodities—was a major cause for decline in overall exports, June also saw a sharper contraction in core (non-oil, non-gold) exports.

The decline in India’s exports mirrors a similar slowdown from the larger Asian region, suggesting reduced demand for goods from advanced economies where the focus has shifted to services consumption, CRISIL noted.

While the decline in commodity prices has played a big role in the fall in dollar value of India’s exports, volumes have declined in many cases too.

For the April-June quarter this year, India’s merchandise exports fell by 15.1 per cent YoY compared with an average decline of 2 per cent in the previous two quarters.

There was a strong decline in merchandise imports in June as well. Overall merchandise imports fell by 17.5 per cent YoY to $53.1 billion, while core imports dropped by 14.5 per cent to $33.3 billion in the month.

With imports declining sharply, merchandise trade deficit marginally narrowed to $20.1 billion in June, from $22.1 billion previous month and the year-ago period.

ALCHEMPro News Desk (DS)