Trade trouble

Lower exports reflect structural weaknesses

In yet another blow to the prospects of the Indian economy in the medium term, the data released this week revealed that export growth has hit a 41-month low. According to the Union Ministry of Commerce and Industry, exports contracted by 9.7 per cent, year-on-year, in June, after a small increase in May.
 
There is no immediate concern about the external account, as imports contracted by a larger amount in absolute terms, and the trade deficit thus decreased. But that is not relevant. The issue is that exports are now a drag on growth, as distinct from being a