According to data released by the commerce and industry ministry, exports stood at $25.01 billion in the month. The fall is only the second time exports contracted in the past year.
Poor performance across all major foreign exchange earners such as petroleum oil, gem and jewellery and engineering goods in June has led to exports contracting by a significant 9.7 per cent, after rising by 3.93 per cent in May.
According to data released by the commerce and industry ministry on Monday, exports stood at $25.01 billion in the month. The fall is only the second time exports contracted in the past year.
The government has blamed this on a high base effect and overwhelming global trading conditions. “While average exports in June have been $22-23 billion since 2015-16, the exports in June, 2018, were relatively quite high at 27.7 billion,” the commerce ministry said in a release.
Critical exports such as processed petroleum took a beating in June with receipts falling by a steep margin of 32.85 per cent. This was due to major refineries in Jamnagar and Mangalore being shut over the month, Commerce Secretary Anup Wadhawan said. He added that exports in the sector are expected to go up in the coming months.
For gems and jewellery, contraction that had gripped the sector periodically since November, continued in June when the sector contracted by 10.67 per cent to ship out $3.13 billion worth of goods. Gem exports had retreated by 7.38 per cent in May. The pace of exports has been hit in the sector, as fund availability dried up in the aftermath of the Nirav Modi fraud.
After being one of the growth pullers in the previous financial year, engineering goods fell by 2.65 per cent. A growth of 4.4 per cent in May had shown signs of recovery in the sector which accounts for nearly one-fourth of the total foreign exchange earned through exports.
Overall, non-oil, non-gems and jewelry exports declined by only 4.86 per cent in June.
Imports also reduced in June, contracting by 9.06 per cent, after rising at a six-month high pace of 4.4 per cent in May. As a result, the consequent trade deficit went down by nearly 8 per cent to $ 15.28 billion in June, a 3-month low.
The largest component of the import bill -- crude oil -- saw the cost of inbound shipments fall by 13.33 per cent to $11 billion. Crude imports had risen by 8.23 per cent in the previous month.
Outbound trade has remained volatile in the current financial year. The World Bank has in its latest projections for the global economy said foreign trade would continue to be sluggish. The Global Economic Prospects report brought out by the multilateral agency last months said trade growth would remain at 2.6 per cent in 2019, down from 3.6 per cent.
According to the latest available data from the World Trade Organization, there was negative export growth in Japan (-5.88), European Union (-4.30), China (-2.75), USA (-2.12) in April.