India’s merchandise exports rebounded and grew 2.25% in July, aided by higher shipments of organic goods, drugs and pharmaceuticals, while imports shrank, narrowing the trade deficit.
Exports had slumped 9.71% in June on the back of intensifying trade tensions between the US and China. The government has started work on measures to boost exports, including a new export promotion scheme.
Sluggish global demand and uncertainties emanating from the tariff war are clearly visible in the slowdown of exports globally.
India’s exports increased to $26.3 billion in July from $25.75 billion a year earlier. Imports declined 10.4% to $39.76 billion last month from $$44.39 billion in July 2018. This resulted in the trade deficit narrowing to $13.43 billion from $18.63 billion a year earlier.
Merchandise exports for April-July registered a marginal dip of 0.37% to $107.41 billion, while imports during these four months dropped 3.63% to $166.80 billion.
Export growth is likely to be in double digits this year despite the challenging situation on both the external and internal fronts.
Non-petroleum and non-gems and jewellery exports in July grew 5.3% to $19.70 billion. Oil imports fell 22.15% to $9.06 billion from $12.33 billion a year earlier, mainly on the back of 14% drop in global crude oil prices.
The depreciation of China’s yuan would not only help reduce the impact of higher tariffs imposed by the US but would also make that country’s exports more competitive, aggravating problems for Indian exporters.
The World Bank had projected a weakening of global trade in 2019 in its Global Economic Prospects released in June.