"The world trade contraction is getting worsened. The worst fear of European sovereign debt crisis is really impacting the world trade. In the US markets also, the appetite has substantially come down...Days coming ahead are tough," Commerce Secretary S R Rao told reporters here.
Reflecting slowdown in the economy, imports too declined by 7.61 per cent to USD 37.9 billion in July, leaving a trade deficit of USD 15.5 billion.
"Trade deficit has fallen but not very comfortably," Director General of Foreign Trade (DGFT) Anup Pujari said.
During the April-July period of 2012-13, exports have shrunk by 5.06 per cent to USD 97.6 billion. Imports during the period dipped by 6.47 per cent to USD 153.2 billion.
Earlier in the day, DGFT had said the cumulative exports figure for the four months was USD 80.44 billion.
Rao said due to the demand slowdown in the two biggest markets - the US and Europe, "it is a stiff challenge" to achieve the exports target of USD 350 billion set up for the current fiscal.
Asked whether the government is planning to provide more incentives to exporters, he said there is need to take more steps to reduce transactions cost of exporters to increase competitiveness of Indian goods in the global markets.
He said that the recent steps like 24x7 working of customs and Electronic Bank Realisation of Cheques would help in substantially reducing the transactions cost.
"We will have to reassess our tactical steps...Several such steps would be taken...We need to focus on how to reduce transactions cost within our own economy," he added.
Last time when exports witnessed such a steep fall was in August 2009. They were down 23.5 per cent then. MORE
