Maersk believes that this decline is due to global factors, like slowing trade growth, and growing trade tensions, as well as domestic factors, such as rural consumer distress, tightening liquidity and a slowdown in key manufacturing sectors.
The slow down in trade is indicative of an overall deceleration in key economic sectors. In the middle of growing worldwide volatility, a slower local economy and the US's withdrawal of preferential access for some Indian products, India's import-export trade could experience headwinds in the coming months, according to Steve Felder, Managing Director, Maersk South Asia.
Namely, India’s exports to China fell by 20%, driven by a reduction in demand for Indian textiles and apparel, which were large export commodities in the same period last year. In addition, imports from China contracted more, by 22%.
Nevertheless, India's recent proposed export promotion plan, along with a production-based support scheme, could advance 'Make in India' and benefit multiple industries. What is more, India can become a beneficiary of the global trade tensions, if it attracts investment, facilitate business index and decrease costs related to logistics, Mr. Felder added.
Another fact is that the rising economic cooperation between India and Saudi Arabia caused the latter to become one of India’s most reliable export partners in the second quarter of 2019, increasing by 74%.
As for the commodity that saw the biggest fall in exports to North America, that was India-made vehicles, which reduced to 11% growth from 67% last year.
Regarding imports, domestic demand for textiles, apparel and accessories from North America grew, while fruits, nuts, vegetables and foodstuff had less demand.