India’s imports declined to their lowest level in four months in June to $40.29 billion, down 9% from a year ago, indicating weakening consumption in Asia’s third largest economy, economists said.
The Indian economy grew at 5.8% in the January-March period, a five-year low, hurt by weak consumption and tepid private investment.
The latest data added to fears that the economy may have slowed further in April-June.
In the last two quarters, the Indian economy has seen a sharp fall in sales of automobiles, petroleum products and consumer goods.
India’s oil imports during June fell 13.33% to $11.03 billion, partly due to low oil prices, while gold imports surged 13% to $2.70 billion.
Imports excluding gold and oil also fell 9% to $26.57 billion in June 2019, the data showed.
“This (falling imports) is not a positive sign ... this is a serious kind of slowdown,” said Rupa Rege Nitsure, chief economist at L&T Financial Holdings.
India’s merchandise exports INEXP=ECI also fell in June, for the first time in nine months, by a year-on-year 9.71% to $25.01 billion, narrowing the trade deficit INTRD=ECI for the month by 8% to $15.28 billion.
Economists linked the weakness in exports to a trade war between the United States and China and the protectionist measures taken by countries.
“(The) de-growth in exports is a reflection of sluggish global demand and rising tariff war ... US-China trade war and developments in Iran further aggravated the problem of the world economy,” Sharad Kumar Saraf, president of the Federation of Indian Export Organisations, said in a statement.
Partial shutdowns at Reliance Industries (RELI.NS), operator of the world’s biggest refining complex in western Gujarat state, and at Managalore Refinery and Petrochemicals Ltd (MRPL.NS) dragged down India’s exports for refined products, trade secretary Anup Wadhawan said.
Exports of commodities, excluding oil and precious metals, also fell 4.86% to $19.15 billion in June from a year ago.