The outward shipments stood at $21.58 billion in August 2015 . The country’s imports too contracted by 14 per cent to $29.91 billion, leaving a trade deficit of $7.67 billion in August, which is the lowest figure in three months.
The trade gap narrowed in August this year from $12.4 billion in the same month last year, according to the data released by the Commerce Ministry. The main export sectors that recorded negative growth in the month include petroleum (14 per cent), leather (7.82 per cent) and chemicals (5 per cent). Reacting to data, the Federation of Indian Export Organisations (FIEO) said the decline has largely been arrested and now “we can look for positive growth from October onwards”.
It would help in taking the shipments to around $280 billion in 2016-17, the FIEO said in a statement. Cumulatively, exports during April-August 2016 contracted by 2.98 per cent to $108.52 billion. Imports during the period too dipped by 15.89 per cent to $143.18 billion, leaving a trade deficit of $34.67 billion. Oil imports during the month fell by 8.47 per cent to $6.74 billion. Non oil imports dip 15.65 per cent to $22.44 billion in August this year. Exports were in negative zone between December 2014 and May 2016 due to weak global demand and slide in oil prices. Shipments witnessed growth only in June this year thereafter again entered into negative zone in July.
Meanwhile, worried over continuous slowdown in exports, the Commerce Ministry is pressing for better exchange rate policy, alignment of freight rates with global standards and a liberalised visa regime to boost shipments. As part of the strategy to boost both exports of goods and services in the long run, the ministry is working on the three important pillars -- exchange rate, visa regime and freight rates, an official said.
In a draft Cabinet note circulated earlier to seek views of different ministries, the ministry has suggested that a mechanism be formulated to ensure the rupee-dollar exchange rate reflects realistic value of the domestic currency. This is important because the rupee, which is apparently overvalued erodes the competitiveness of Indian products in the global markets. “We have to do the adjustments in our exchange rate policy. This is very important to increase competitiveness of our products. The exchange rate policy should be based on inflation differential and trade deficit,” the official said.
Govt clarifies it does not plan to devalue Rs; ‘market to decide value’
As the rupee saw a sudden plunge this morning on reports of currency devaluation, Finance Ministry officials on Thursday said there were no plans to devalue the domestic unit and its value will continue to be determine by the market. With exports falling in all but one of the past 20 months, there were reports that the Commerce Ministry may discuss with Finance Ministry possible rupee-devaluation.
“Commerce Ministry pushes for all these things. There is no proposal to devalue,” a top Finance Ministry official said. “Exporters would have come to the Commerce Ministry with this issue. However, there is nothing to discuss from our side.” Commerce Minister Nirmala Sitharaman too said she had not said that the government was discussing a devaluation. “I had no conversation on devaluation of any currency with any news correspondent. Any quotes/mentions referring to me on this topic baseless,” she tweeted.
Economic Affairs Secretary Shaktikanta Das also said rupee is not an administered rate. “The value of rupee is determined by the market and there is no plan to change the policy. The market reports that government want to devalue rupee is false,” he told reporters here. The Indian currency fell abruptly after devaluation reports, but trimmed losses after denial from the government.
Gold imports dip 77% to $1.11 bn
Gold imports fell by 77.45 per cent to $1.11 billion in August due to sliding prices of the metal in both global and domestic markets. According to the data of the commerce ministry, gold imports had stood at $4.95 billion in August last year. The imports of the metal have been declining since February this year. Dip in the imports help contain the current account deficit (CAD).