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India's exports registered a steepest decline in 13-month falling 9.3 per cent in August to $34.71 billion due to global economic uncertainties, while the trade deficit soared to a 10-month of $29.65 billion.
According to the government data released on Tuesday, imports increased by 3.3 per cent to $64.36 billion, which is a record high, due to a significant jump in the inbound shipments of gold and silver.
While gold imports more than doubled to $10.06 billion in August from $4.93 billion in the same month last year, silver imports swelled to $727 million in the month under review from $159 million in August 2023.
Due to a decline in petroleum prices, crude oil imports dipped by 32.38 per cent to $11 billion.
The dip in prices has also impacted the merchandise exports.
The trade deficit, or the gap between imports and exports, in October 2023 was $30.43 billion.
The merchandise exports in July last year contracted by over 10 per cent.
India's merchandise exports dipped by 1.5 per cent in July.
Exports during April-August this fiscal increased 1.14 per cent to $178.68 billion, and imports grew 7 per cent to $295.32 billion.
Merchandise trade deficit during April-August 2024 was $116.64 billion compared to $99.16 billion during April-August 2023.
Briefing the media on data, Commerce Secretary Sunil Barthwal said that in the current global situation, exports is a huge challenge.
Reasons like slowdown in China and continued recession in the EU and the US too are impacting the exports; dipping oil prices and rise in transportation cost due to the Read Sea crisis are hurting the shipments.
"There are a lot of challenges in trade," Barthwal told reporters.
However, he added that despite these issues India's exports during the first five months of this fiscal have registered a positive growth.
Exports of petroleum products declined by 37.56 per cent to $5.95 billion during the month.
To further push the shipments of goods, the commerce ministry is focusing on exploring new markets in regions like Africa.
Besides, he said, 12 champion services sectors have been identified such as education, health care, shipping, and transportation, to push their shipments as they hold huge opportunities.
"We are focusing on these sectors.
"If we have to reach the $2 trillion exports target of goods and services, 50 per cent will be coming from the services sector," he said, adding that these sectors are not impacted by global issues.
"Despite dark clouds, India is a bright spot," the secretary said.
When asked about the high trade deficit, he said it is not a matter of concern for an emerging economy like India.
He explained that at one point in time, China also maintained larger trade deficits.
"There is a huge consumption demand (in India) which is coming from an economy which is growing at double the rate at which the world economy is growing...
"Once you join the global value chains and it gives you forward and backward linkages, you have to import certain things in order to export," he said.
The other export sectors, which have recorded negative growth during the month, include rice, oil meals, marine products, iron ore, and gems and jewellery.
However, electronic goods, pharma and engineering exports rose 7.85 per cent, 4.67 per cent and 4.36 per cent, respectively, in August.
The estimated value of service exports during April-August 2024 stood at $150.18 billion compared to $135.5 billion in the same period last year.