Exports shrank by as much as 13.96 per cent in April to $22 billion making it the fifth consecutive month of contraction as the demand for Indian goods slumped due to the global slowdown, official figures released on Friday showed. In April 2014, merchandise exports had touched $25.63 billion.
The contraction in exports also drags down the overall economic growth rate of the country. "The prime reason continues to be softening of crude, metal and commodity prices. Equally worrying is negative growth in gems and jewellery, electronics and plastic goods," Federation of Indian Export Organisations (FIEO) said.
"There is a fall in order MY BIZ 31 Global slowdown, softening of crude and metal prices hit trade booking for coming months particularly from buyers in the Middle East, Africa and Latin American countries," said Ajay Sahai, a senior executive at the FIEO, warning that exporters could be forced to lay off workers if sales orders continued to decline over the next four to five months.
FIEO president S.C. Ralhan said that negative growth in exports is continuing since December 2014 though the decline has come down from 21 per cent in March 2015 to 14 per cent in April 2015. The prime reason continues to be softening of crude, metal and commodity prices.
What is "worrying is the negative growth in gems and jewellery, electronics and plastic goods as domestic capacities are being augmented in these sectors", Ralhan added.
Imports declined as well by 7.48 per cent to $33 billion leaving a trade deficit of $11 billion in the month under review, according to the data released by the commerce ministry.
Oil imports dipped 42.65 per cent during April to $7.44 billion. Gold imports surged by 78.33 per cent year-on-year to $3.13 billion in April on declining prices and easing of restrictions by the Reserve Bank of India as against $1.75 billion in the same month of 2014.