India’s exports contracted by 10.2 per cent in July, slightly lower than June’s 12.4 per cent, as trade of major foreign-exchange earners such as petroleum, gems, electronics, and textiles remained subdued.
Outbound trade stood at $23.64 billion last month, completing its fifth straight month of contraction. However, July’s fall was at a much lower rate than the 60.28 per cent and 36.47 per cent recorded in April and May, respectively.
In July, exports were stabilised by large shipments of engineering goods and pharmaceuticals being cleared over the month. Engineering goods exports rose 8 per cent to $6.6 billion, following a 7.5 per cent fall in the previous month. The sector accounts for nearly one-fourth of the foreign exchange earned through exports.
“With the resurgence of (Covid-19) cases in several parts of the world, it will be difficult to say whether the positive trend, as seen in engineering exports, can be sustained,” said Mahesh Desai, chairman, Engineering Export Promotion Council of India.
Drug exports also continued to capitalise on the pandemic, seeing growth almost double to 19.5 per cent from 9.8 per cent in June. However, all other major export categories remained deep in the red. The biggest revenue earner, petroleum products, registered a 51.5 per cent decline, worsening from June’s 31 per cent fall. Consumer products such as textiles, gems and jewellery, and electronic goods, among others, continued to show contraction at almost similar levels.
But policymakers pointed to emerging signs of a broad-based recovery. “In July, 16 of the 30 major product groups showed growth, up from 12 in the previous month, indicating that more number of industries are now up and running. This will have a multiplier effect soon and improve the figures,” a senior commerce department official said.
Exporters say trade is gradually reaching the previous year’s level. “Business/order enquiries from almost all major economies like the US, EU, Canada, Japan, South Korea, Australia, and New Zealand have helped in bringing the exports sector to almost 90 per cent of the level in July 2019,” said Sharad Kumar Saraf, president of the Federation of Indian Export Organisations (FIEO).