Slipping for the fifth straight month, India’s merchandise exports contracted 1.8% in December, while the trade deficit reduced to $11.25 billion from a year ago, the Trade Ministry said in a statement on Wednesday.

The dipping exports are expected to impact the dwindling economy which has fallen to an 11 year low of 5 per cent.

18 out of 30 key segments experienced negative growth in exports during the month. Industrial output also fell due to poor performance by the manufacturing, power generation, and mining sectors.

The exports fell to $27.36 billion in December, while imports dipped 8.83% to $38.61 billion, the data showed. India’s trade deficit stood at $14.49 billion in December 2018, the statement said.

Imports reduced by 8.83% $38.61 billion, bringing down the trade deficit to $11.25 billion during the month under review, as compared to $14.49 billion in December 2018.

Oil imports contracted by 0.83 per cent to $10.69 billion, while gold imports fell by about 4% to $2.46 billion.

‘The decline in the merchandise trade deficit in December 2019 relative to December 2018 was driven by the relatively broad-based contraction in imports, led by industrial inputs such as coal, chemicals, iron and steel, and non-ferrous metals, transport equipment, and consumer items such as precious and semi-precious stones,’ Aditi Nayar, principal economist at ICRA said.

During April-December 2019-20, exports slipped 1.96$% to $239.29 billion, imports declined by 8.9% to $357.39 billion, leaving a trade deficit of $118.10 billion.

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