New Delhi: Belying hopes of a sustained recovery in India’s merchandise exports, outbound shipments fell once again in July by 6.84% to $21.7 billion, after expanding for the first time in 19 months in June.

In July, shipments of only eight of the 30 major export items increased, including gems and jewellery (8.8%), as against 17 items in June. Exports of pharmaceuticals, chemicals, engineering goods, ready-made garments and petroleum products posted a significant decline.

Imports during the month also declined by 19.03% to $29.5 billion, leading to a $7.8 billion trade deficit. Gold imports declined 64% to $1.1 billion.

Federation of Indian Export Organisations president S.C. Ralhan said that the decline in exports reflects the contraction in global trade, adding that the increasing uncertainties due to Brexit, the UK’s decision to exit the European Union, have compounded the problem.

“The decline in exports of engineering goods, leather and textiles is a major concern as these are employment-intensive sectors. The package given to the textiles sector will take some time before its effect is visible in exports. The new GST (goods and services tax) regulation will add to the competitiveness of exports through better rebating of taxes though many of the concerns of the export sector need to be addressed in the model GST law,” he added.

World trade has been shrinking as demand slowed in key American and European markets. Growth in the volume of world trade is expected to remain sluggish in 2016 at 2.8%, the same as in 2015, the World Trade Organization said in an April report.

The government’s earlier target of $900 billion from exports of goods and services by 2020 and raising the country’s share in world exports to 3.5% from 2% now looks more daunting.