GST Collections Showed Marginal Decline in June 2019

India’s overall merchandise and services exports in June 2019 are estimated to be USD44.46 Billion, registering a marginal decline of 0.27% as compared to June 2018.

The cumulative value of overall goods and services exports during April – June 2019 is estimated at USD137.26 Billion, registering a growth of 3,14%.

The value of merchandise exports during June 2019 has been USD 25.01 billion as compared to USD 27.70 billion in June 2018, thus, registering a negative growth of (-) 9.71 per cent. However, non-POL exports for June 2019 declined only by 5.73%. Further, non-POL and non-gems and jewelry exports declined by only 4.86%

The value of merchandize imports in June 2019 have also shown negative growth. They were USD 40.29 billion in June 2019 as compared to USD 44.30 billion in June 2018, a decrease of (-) 9.06 percent.

Merchandise trade deficit during June 2019 has been USD 15.28 billion as compared to USD 16.60 billion in June 2018. Thus there is a decline (improvement) of (-) 7.98%.

As per RBI data for services exports for June 2019, services exports in that month are estimated to have grown by 15.24%.

Merchandise Exports

The above decline inexports in June 2019 is due in large part to a base effect of an extraordinarily good month in June 2018 impacting growth figures for June 2019. While the average exports in the month of June have been USD 22-23 billion since 2015-16, the exports in June 2018 were relatively quite high at USD 27.70 billion.

The negative growth in June 2019 is also consistent with certain global trends, which have impacted India’s exportsin recent months. The World Bank in its Global Economic Prospects (June 2019) has projected weakening of global trade in 2019. Global trade is projected to grow at 2.6% this year – a full percentage point below their previous forecast.

Various major economies of the world have also shown negative export growth in recent months. As per the latest WTO data available for April 2019, there is negative export growth in Japan(-5.88),European Union (-4.30), China(-2.75), USA(-2.12)

The major commodities, which, contributed towards this decline in June 2019 have been Petroleum products (-32.85%), Rice (-28.05%), Cotton yarn/Fabrics/made-ups (-19.73%), Gems and Jewellery (-10.67%), Readymade garments (-9.18%), Organic & inorganic chemicals (-8.17%), and Engineering goods (-2.65%),

Factors influencing the decline for some major commodities are:

Temporary shutdown of ONGC Mangalore Petrochemical Limited (from 17/04/2019 to 28/06/2019) for maintenance., has adversely impacted exports of petroleum products. Jamnagar refinery also experienced a routine maintenance related disruption in June 2019, which is likely to abate by mid-July 2019. The fall in the global Brent price ($/bbl) by 15.81% in June 2019 vis-à-vis June 2018 as per data available from World Bank, is also a factor in the declining value of petroleum product exports.

Engineering goods have been affected because of a fall in global prices of steel.

During this period exports to UAE (-) 15.31 %, China (-) 14.09 % and Hong Kong (-) 9.68 % have shown significant decline.

Department of Commerce is pro-actively pursuing an export promotion strategy involving conscious engagement with the EPCs and exporters to quickly address domestic and overseas constraints impacting exports.

A special initiative has been underway with respect to China and the US in light of opportunities offered by their trade dispute.

Merchandise Imports

The decline in June 2019 is also witnessed in the merchandize imports. In June 2019 merchandise imports have been USD 40.29 billion as compared to USD 44.30 billion in June 2018, a decrease of (-) 9.06 percent. The cumulative value of Imports during April-June 2019 has been estimated at USD 127.04 billion compared to USD 127.41billion during April-June 2018 registering a negative growth of (-) 0.29 percent.

Import of petroleum crude & products in June 2019 (USD 11.03billion) has recorded a negative growth of 13.33% as compared to June 2018 (USD 12.73billion). In this connection it is mentioned that the global Brent price ($/bbl) has decreased by 15.81% in June 2019 vis-à-vis June 2018 as per data available from World Bank. 

Merchandise trade deficit during June 2019 has been USD 15.28 billion as compared to USD 16.60 billion in June 2018. Thus there is a decline of (-) 7.98%.