New Delhi: India’s exports declined the least in eight months in August as overseas sales of coal, rice and tobacco picked up.
Merchandise shipments dropped 19.4% from a year earlier to $14.3 billion after sliding 28.4% in July, the commerce ministry said in a statement in New Delhi on Thursday.
The global export slump is easing as the world begins to recover from its worst recession since the 1930s, reviving demand for made-in-India Maruti Suzuki India Ltd vehicles and other goods. South Korea’s exports fell at the slowest pace in 11 months in September, while China’s manufacturing expanded at the fastest pace in 17 months during the month, separate reports said on Thursday.
In demand: Maruti cars lined up for exports at JNPT Port. Ashesh Shah / Mint
“The worst is over for both exports and imports,” said Sujan Hajra, chief economist at Anand Rathi Financial Services Ltd in Mumbai. “In fact, India’s imports are strengthening faster than exports, indicating stronger domestic demand.”
India’s export decline has eased after plunging 33.3% in March, the biggest fall on record, according to Bloomberg data going back to April 1995. Overseas sales account for about 15% of the economy.
Still, demand for the nation’s gems, engineering goods, leather and drugs continues to be in serious trouble with the slumping economies in the US and Europe, India’s main export markets, commerce secretary Rahul Khullar said on 10 September.
Commerce minister Anand Sharma has urged exporters to explore new markets in Africa and Latin America to offset shrinking demand in the US and Europe, which account for 40% of the nation’s exports.
The government on 27 August extended tax refunds and announced incentives for exporters. In August, India signed a free trade agreement with South Korea and the 10-member Association of Southeast Asian Nations as it attempts to diversify its overseas markets.
Imports fell 32.4% to $22.7 billion in August after declining 37.1% in July, Thursday’s report showed.
The trade deficit widened to $8.3 billion from $6 billion in the previous month.