India’s export growth slumped to a five-month low of 2.35% in August at $26.95 billion, while trade deficit jumped to $10.83 billion, a four-month high on the back of surging gold imports.
Gold imports jumped significantly to $2.03 billion last month, from $738.7 million a year ago.
Exporters body, Federation of Indian Export Organisations (FIEO) attributed the poor performance of exports to slowdown in European markets.
“The situation in EU is still bad. The exporters are waiting for the new foreign trade policy. We are expecting measures to boost exports,” FIEO president Rafeeq Ahmed said.
Trade deficit in August was highest in the last four months.
The latest trade data comes barely a weeks before the government’s planned announcement of a new five-year foreign trade policy that will likely include sops for domestic value added products, new rules for special economic zones and a probable review of free trade agreements that India had signed with various countries and groups of nations.
China and India are also likely to announce a series of measures during President Xi Jinping’s visit this month that would include efforts to reduce the trade deficit with China.
India’s trade deficit with China has increased from $39.44 billion in 2011-12 to $ 40.77 billion in 2012-13. Meanwhile, exports to China have fallen from $18.08 billion in 2011-12 to $13.53 billion in 2012-13.