Exports have been affected by the slowdown around the world.
Contracting for the ninth month in a row, India's exports plunged by 20.66% in August to $21.26 billion, widening the trade deficit.
The significant slump in country's exports is attributed to the global slowdown and declining commodity prices worldwide.
In August 2014, merchandise exports had amounted to $26.8 billion. The last time exports registered a positive growth was in November 2014, when shipments had expanded at a rate of 7.27%.
Imports too declined by 9.95% to $33.74 billion in August this year due to high gold imports, leaving the trade deficit at $12.47 billion, according to the data released by the commerce ministry.
However, the trade deficit has narrowed in August as compared with July this year, when the figure stood at $12.81 billion. In August last year, the deficit was $10.66 billion.
Gold imports rose by 140% to $4.95 billion in the month under review from $2.06 billion in August last year.
The main exporting sectors which reported decline in exports include petroleum products (fall of 47.88%), engineering (29%), leather and leather goods (12.78%), marine products (20.83%) and carpet (22%).
Exporters expressed concerns over the continuous decline. The government should immediately announce steps such as an extension of interest subvention scheme to control this decline, Federation of Indian Export Organisations (FIEO) president S C Ralhan said.
Also, oil imports dropped 42.59% in August to $7.35 billion. Oil imports account for about 31% of the total imports. Petroleum product exports account for 18% of the country's total exports.
Non-oil imports, however, grew by 7.01% to $26.38 billion.
During the first five months (April-August) of the current financial year, exports are down 16.17% at $111.09 billion. Imports too have declined 11.61% to $168.6 billion, resulting in a trade deficit of $57.5 billion.
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