India's outbound shipments contracted for the eighth month on the trot in July as a global slowdown threatens to clip the wings of Asia's third biggest economy, boosting the case for the Reserve Bank of India (RBI) to cut interest rates for the fourth time this year.
Exports slid by 10.3 per cent to USD 23.13 billion in July 2015 from USD 25.79 billion in the same month a year ago, data released by the Indian Commerce Ministry showed.
Exports have been in contraction territory since December as rising global economic uncertainty amid fears over US monetary tightening, the crisis in Greece and a worsening China slowdown and stock market turmoil dimmed the lure for outbound Indian merchandise shipments. The value of India's petroleum shipments have also been hit by the steepest decline in crude oil prices since the Great Recession.
To add to the pain of India's exporters, the massive devaluation of the Yuan by China may also hurt the competitiveness of the country's exports, prompting calls for the government to quickly frame a strategy to spur a rebound in exports.
Meanwhile, Imports fell 10.3 per cent to USD 35.95 billion in July as the value of oil imports fell but Gold imports soared, pushing the county's trade shortfall to the highest level in eight months at USD 12.81 billion.