(Recasts, adds detail)
By Arup Roychoudhury and Matthias Williams
NEW DELHI, July 13 India's exports fell nearly
5.5 percent in June due to weak demand from Europe and the
United States, a trade ministry official said, adding pressure
on Asia's third-largest economy.
Imports also fell sharply, however, thanks in part to lower
global oil prices, and narrowing the trade deficit to $10.3
billion compared to the previous month, something of a silver
lining that may help assuage concerns about India's balance of
Exports were down 5.45 percent to $25.1 billion in June from
a year earlier, while imports fell 13.46 percent, Anup Pujari,
director general of foreign trade told reporters on Friday,
citing provisional data. The final numbers will be published
"World over, there has been a tremendous dip in the world
trade," Trade Secretary S. R. Rao said at the same event. He
warned that the debt crisis in Europe, which accounts for a
third of India's trade, showed no sign of a resolution.
"In the euro zone, we don't see any finality. Apart from
distress in Greece, now we find that both in Spain and Italy
also their borrowings are more than their actual GDP."
"The sad news is that the U.S. market is also contracting,"
he said, forecasting up to two years of depressed trade.
Exports account for more than a fifth of India's GDP.
Other Asian exporters also reported gloomy news on Friday as
global demand sputters, with China's second-quarter growth
slowing to a three-year low and South Korea's central bank
cutting its GDO growth forecasts for the year. Singapore
reported a surprise contraction.
CURRENT ACCOUNT DEFICIT
India's current account deficit touched a record high in the
March quarter, keeping the balance of payments in deficit for
the second quarter in a row.
The widening current account deficit has weighed on the
rupee, pulling the currency to a record low of 57.32 to the
dollar on June 22.
India's economic growth has slowed to its worst pace in nine
years and inflation is stubbornly high. Economists say an uptick
in industrial output is too small to signal a recovery.
After recording strong growth for much of last year, India's
overseas sales tanked in March and have risen only one month
since. Exports between April and June fell 1.7 percent,
totalling $75.2 billion.
Exports in sectors where India had shown strong growth last
year, engineering goods and petroleum products, fell in June.
The Asian Development Bank on Thursday cut its 2012 growth
forecast for India to 6.5 percent from a forecast of 7.0 percent
made in April.
(Reporting by Matthias Williams and Arup Roychoudhury; Editing
by Frank Jack Daniel)