Contracting for the second straight month, India's exports shrank by a record 60.28 per cent in April to USD 10.36 billion, mainly on account of the coronavirus lockdown, official data showed on Friday.
Imports too plunged by 58.65 per cent to USD 17.12 billion in April, leaving a trade deficit of USD 6.76 billion as against USD 15.33 billion in April 2019, according to the data by the commerce and industry ministry.
This is the lowest trade deficit since May 2016, when it had stood at USD 6.27 billion.
The country's exports had declined by 34.57 per cent in March 2020.
"The decline in exports has been mainly due to the ongoing global slowdown, which got aggravated due to the current Covid-19 crisis. The latter resulted in large scale disruptions in supply chains and demand resulting in cancellation of orders," the ministry said in a statement. Barring iron ore and pharmaceuticals, all the remaining 28 key sectors registered negative growth in the month under review.
Gems and jewellery shipments declined 98.74 per cent, followed by leather (- 93.28 per cent), petroleum products (- 66.22 per cent), engineering goods (- 64.76 per cent), and chemicals (- 42 per cent) . Oil imports in April were USD 4.66 billion, which was 59.03 per cent lower as compared to the same month last year. All 30 key imports sectors like gold, silver, transport equipment, coal, fertiliser, machinery and machine tools posted negative growth during the month.
Non-oil imports fell 58.5 per cent to USD 12.46 billion in April. Gold imports stood at USD 2.83 million, as against USD 4 billion in April 2019.
The nationwide lockdown to contain the spread of the coronavirus outbreak began on March 25, shutting industrial units and restricting movement of goods. Commenting on the numbers, Federation of Indian Export Organisations (FIEO) said it is "highest-ever" decline in monthly exports, and demanded an incentive package from the government.
FIEO President Sharad Kumar Saraf said the lockdowns around the world have not only pushed business sentiment to the lowest levels but also impacted supply chains and economic growth.
"We may expect revival in exports from the third quarter of the fiscal, depending on the condition evolving in the international market.
"With major global players including the US, UK, Canada, Japan, Germany, France, Austria, Spain, and Bangladesh having provided bailout or financial packages to their industry to sail through these difficult times, it is also expected that the same would help in bringing good news for the overall international trade," Saraf said.
He said with cancellation of 70-80 per cent of orders, job losses and rising NPAs among exporting units, the government should immediately implement the economic measures announced at the ground level for quick revival.
Meanwhile, Finance Minister Nirmala Sitharaman on Friday announced measures to promote agri exports.
Mohit Singla, chairman of Trade Promotion Council of India (TPCI), said the announcement would help India achieve its target of USD 100 billion agri exports. "The proposed amendment in essential commodity act is a welcome step in deregulating the agri sector which will save the farmers from artificial price management activities by different forces," Singla said.
Since 2011-12, India's exports have been hovering around the USD 300 billion mark. During 2017-18, the overseas shipments grew by about 10 per cent to USD 303 billion and further to USD 330.08 billion in 2018-19 and USD 314.31 billion in 2019-20.
The drop in exports is in sync with the projections of the World Trade Organisation (WTO), which has stated that world trade is expected to fall between 13 per cent and 32 per cent in 2020 due to the COVID-19 pandemic.