Representational Image. Image Courtesy: Times of India
New Delhi: India's exports dropped 1.8% to $27.36 billion in December 2019, the fifth straight month of contraction, on account of a significant fall in shipments of plastic, gems and jewellery, leather products and chemicals.
Imports too fell for the seventh consecutive months, down 8.83% at $38.61 billion in December 2019 -- helping narrow the trade deficit to $11.25 billion, showed government data released on Wednesday.
Gold imports shrunk by about 4% to $2.46 billion during the month under review.
The trade deficit was $14.49 billion in December 2018.
Of the 30 key sectors, as many as 18 segments showed negative growth in exports during the month.
Shipments of plastic, gems and jewellery, leather products, chemicals, carpet, petroleum and engineering goods contracted by 18.14%, 7.55%, 5.26%, 4.5%, 4%, 3.6%, 0.57%, respectively in December 2019.
The country's outbound shipments have remained subdued so far this year. It may have a bearing on the overall economic growth, which fell to over six-year low of 5% in the first quarter of the current fiscal.
Industrial output declined due to poor performance by manufacturing, power generation and mining sectors.
The outbound shipments contracted by 0.34% in November last year and 1.11% in October.
In December last year, oil imports declined by 0.83% to $10.69, and non-oil imports fell by 11.56% to $27.92 billion.
Cumulatively, during April-December 2019, exports were down 1.96% to $239.29 billion while imports contracted by 8.9% to $357.39 billion.
Trade deficit during the period narrowed to $118.10 billion as against $148.23 billion in April-December 2018-19.
Meanwhile, a Reserve Bank of India release showed that services export for November 2019 stood at about $18 billion while imports were at $11.5 billion.
Commenting on the figures, Apparel Export Promotion Council of India (AEPC) Chairman A Sakthivel said government support would help the industry to further push the exports.
"Rebate of State and Central Taxes and Levies Scheme (RoSCTL) and Merchandise Export from India scheme will five a much needed support to apparels and made ups sector," he said.
Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said global and domestic factors had again led to decline in exports.
The currency volatility besides fluctuation in commodities prices including that of crude have led to the decrease in exports of petroleum, which is a major constituent of exports.
"Domestic issues including uncertainty over MEIS was a major cause of concern as exporters' claim for over five months are still pending, which has completely wiped out their liquidity and has kept them in doldrums with regard to finalising new contracts," Saraf said.