Falling exports
The estimates for foreign trade show a sharp slowdown in merchandise export growth in April, to 0.64% from last earlier. If we do not count 31% increase in shipments of petroleum products to overseas markets, India’s export of goods actually contracted by over 3% in dollar terms last month.

Analysis of decrease in exports
The fall in exports was seen in 16 out of 30 major product groups. The fall was noticed in engineering and even traditionally strong export sectors — gem and jewellery, leather and leather products, textiles and garments and drugs and pharmaceuticals.

These sectors are all key providers of jobs. Thus, reduction in these sectors will impact jobs, wages and consumption demand in the domestic market.

Rising imports
Imports grew by 4.5% to $41.4 billion in April due to purchases of crude oil and gold. Excluding oil and gold, however, imports shrank by more than 2% last month, signalling that import demand in the real productive sectors has reduced.

As a result of merchandise imports outpacing exports, the trade deficit has widened to $51.9 billion in the first nine months of fiscal 2018-19. It has already surpassed the preceding financial year’s 12-month shortfall of $48.7 billion.