Commerce secretary Sunil Barthwal said there were “good signs” as some green shoots were visible. “It means the global situation is improving. The trade deficit, which has always been a concern, but the figures (for August) are looking good. It is a soothing factor for the economy,” he told reporters.
The government is also drawing comfort from the fact that in several prominent products, export volumes were higher even though the overall value had declined – indicating that the demand situation wasn’t as bad and higher commodity prices would push up the overall value of shipments. In the case of petroleum products for instance, during April-July, the volumes were 6% higher although the value had declined by 27%, an analysis by the commerce department showed (see graphic).
Barthwal blamed the slowdown in Europe and some other parts of the globe for muted demand for products such as textiles and gems & jewellery, as high inflation and an increase in interest rates have reduced discretionary spending.
Ready-made garment exports are estimated to have fallen over 8% to $1.1 billion in August and by around 16% to $6 billion during April-August. Gems & jewellery saw the second steepest fall of 22% in August, next only to petroleum products whose exports contracted over 30% to $5.9 billion.
Engineering goods, the biggest item in India’s export basket, saw a 7.7% rise to $9 billion – the first after eight months – even as they were 4.5% lower at $44.6 billion during April-August.