Exports dive 15% in July

Exports declined 14.8% in July to $22.4 billion, the sharpest contraction in three years, in the wake of falling demand from Europe and the US.
With imports too declining by almost 8% during July, the slowdown in the domestic industry seems to be pronounced as companies seem to be importing less raw material and capital goods for production. Industrial output fell nearly 2% in June and there are little signs of demand having picked up.
But, given the faster pace of decline in exports, trade deficit, which is already a worry, expanded from $14.8 billion in July 2011 to $15.5 billion this July. A weaker rupee should spur exports and imports would be discouraged as shipments into the country would get more expensive.

The government is, however, expecting the tide to turn in a few months on the back of incentives that it has announced.