June exports decline 4.6%; trade deficit narrows

Trade deficit narrows to $12.25 bn on gold

Exports fell in June by 4.6 per cent to $23.8 billion from $24.9 billion in the same month of 2012. The better news was that imports in June came down by 0.4 per cent to $36 billion from $36.2 billion in June 2012.

The trade deficit for June was $12.25 billion, compared to $20.1 billion in the earlier month, May. However, the June deficit was higher than the $11.2 billion recorded in June 2012, according to data issued by the ministry of commerce and industry. The fall in the June deficit was due to moderation in gold imports, at $2.45 billion during the month from $8.4 billion in May, said Anup K Pujari, director-general of foreign trade (DGFT), while releasing the numbers.

In May, gold and silver imports were up 89 per cent over the same month in 2012. Gold import in June this year was 22.8 per cent higher when compared on a year-on-year basis, the DGFT added.

 

Total exports in the April-June quarter were $72.45 billion, down 1.4 per cent compared to the $73.5 billion in the first quarter of 2012-13. Contrarily, in this first quarter of the financial year, imports rose six per cent to $122.6 bn over $115.7 bn in the comparative period. Thus, the total trade deficit in April-June was $50.2 billion, higher than

 

the $42.2 billion in the corresponding period of 2012-13.  Oil import in June rose 13.7 per cent to $12.8 billion from $11.2 billion in June last year. Total oil import during the first quarter was $41.9 bn, up 6.4 per cent from $39.35 billion last year.

Non-oil import in June was $23.3 billion, up 6.7 per cent from $24.9 billion. Cumulatively, non-oil import grew 5.8 per cent to $80.8 billion, compared to $76.35 billion in last year’s June quarter.

On export growth prospects in the backdrop of a falling rupee, Pujari said exporters had not been able to take much advantage because orders were already booked at previous prices, when the rupee was at 50-55 to a dollar. “They cannot take advantage for future bookings also, as nobody knows whether the rupee will remain weak or not,” he added.

According to CRISIL, subdued global demand and renegotiation of contracts by clients would limit the upside for export-oriented firms, which these days rely on demand and competitiveness than currency movements.

M Rafeeque Ahmed, president, Federation of Indian Export Organisations, said while the numbers were "disappointing", the competition was not doing much better. China’s exports, for instance, fell three per cent in June. He urged the Reserve Bank to put export credit under priority sector lending.