Export growth is slipping once again
Any hopes of a boost to the economy through an improvement in external demand seem to be fizzling away.
The chart shows that after a brief flare-up between February and April this year, caused by a rebound in commodity prices, the year-on-year rate of growth in merchandise exports has waned equally rapidly. That is true for overall exports as well as non-petroleum products’ exports. Note that July’s tepid growth in exports comes on top of a negative rate of growth in the year-ago period.
That’s not all. Data for India’s services exports for the month of June were also released on Monday. They showed that services exports fell by 0.3% compared to a year ago.
With no signs of a turnaround in investment and with weak external demand, it is now up to consumption to support the Indian economy. And consumption will have to buck up in spite of the disruption caused by the introduction of the goods and services tax. No wonder the Economic Survey seemed desperate to revive growth.