New Delhi, March 11: Exports contracted for the first time in eight months by 3.67 per cent to $25.68 billion in February, signalling the country could miss its shipment target for the second straight year.
Exports stood at $26.6 billion in the year-ago period.
Trade deficit, the gap between exports and imports, however, narrowed by 42 per cent to $8.1 billion in February, the lowest level in five months. It improved mainly on account of a 71.42 per cent decline in gold and silver imports to $1.63 billion in February from $5.71 billion in the same month a year earlier.
Imports declined 17 per cent to $33.8 billion from $40.7 billion, according to data released by the government today.
“The export numbers are much below our expectations. The decline in exports is because of an amalgamation of factors such as sluggish manufacturing, contraction in global demand and restriction on current and capital account in a few countries in Latin America,” Rafeeque Ahmed, president of the Federation of Indian Export Organisations, said.
Some exporters have blamed the decline on waning demand from leading markets such as the US and Europe.
“The deceleration in exports in February instead of an increase reflects the inability of Indian exporters, particularly those in small enterprises, to stay competitive,” Anupam Shah, the chairman of EEPC, an industry body for export of engineering goods, said.
“Credit is the biggest problem which exporters are facing. Arrears of duty refund claims have crossed Rs 20,000 crore. Global demand is there but we are unable to take advantage of this because of the credit problem,” Ahmed said.
He felt the country might achieve exports of $310-315 billion during the fiscal, which is below the target of $325 billion fixed by the government. For the April-February period, exports were up 4.79 per cent to $282.7 billion.
“If we follow the same trend as we did last March, it (exports) should be close to $310 billion (by end of the current fiscal),” commerce secretary Rajeev Kher said.
“I will not be happy with $310 billion. We need to have better performance...We have not done well as we should have,” Kher told reporters here.
The decline in February exports could be a setback to the government’s expectation of achieving a 4.9 per cent growth in the current fiscal.