India's exports dropped by 6.05 per cent to USD 26.13 billion in August mainly on account of significant dip in shipments from key sectors such as petroleum, engineering, leather, and gems & jewellery.
The WTO on Tuesday sharply cut global trade growth forecasts for 2019 to 1.2 per cent from the earlier 2.6 per cent, mainly due to trade tensions and sluggish global economy. This growth projection will not augur well for India, as it is struggling to increase its exports.
“Escalating trade tensions and a slowing global economy have led WTO economists to sharply downgrade their forecasts for trade growth in 2019 and 2020,” the organisation said in a statement.
World merchandise trade volumes are now expected to rise by only 1.2 per cent in 2019, substantially slower than the 2.6 per cent growth forecast made in April, it said. It added that the global trade growth is projected to grow at 2.7 per cent in 2020, down from the previous projection of 3 per cent.
“Risks to the forecast are heavily weighted to the downside and dominated by trade policy. Further rounds of tariffs and retaliation could produce a destructive cycle of recrimination,” the World Trade Organisation (WTO) said. A sharper slowing of the global economy could produce an even bigger downturn in trade, it added.
WTO Director-General Roberto Azevedo said the darkening outlook for trade is discouraging but not unexpected. “Job creation may also be hampered as firms employ fewer workers to produce goods and services for export,” he said, adding “resolving trade disagreements would allow WTO members to avoid such costs”.
India’s exports dropped by 6.05 per cent to USD 26.13 billion in August mainly on account of significant dip in shipments from key sectors such as petroleum, engineering, leather, and gems & jewellery.
Imports too declined by 13.45 per cent to USD 39.58 billion, narrowing trade deficit to USD 13.45 billion in August, according to the commerce ministry data. The imports slipped the most after August 2016, when it had contracted by 14 per cent.
Out of 30 key sectors, as many as 22 showed negative growth in August. Shipments of gems and jewellery, engineering goods, and petroleum products contracted by 3.5 per cent, 9.35 per cent and 10.73 per cent, respectively.
The country’s outbound shipments have remained subdued so far this year. It will have implications on the overall economic growth, which has reported over six-year low growth of 5 per cent in the first quarter of the current fiscal.