The performance of the international trade sector in India has seen a downturn in July, thwarting hopes of a sustained recovery.

Official data from the country's commerce ministry shows that outbound shipments fell by 6.84 per cent to $21.7 billion (€19.42 billion), with the drop coming after June saw the first sign of growth for 19 months.

Meanwhile, imports declined by 19.03 per cent to $29.5 billion, resulting in a $7.8 billion trade deficit for the month. Of India's 30 major export items, only eight saw an increase during July, with pharmaceuticals, chemicals, engineering goods, ready-made garments and petroleum products all seeing significant declines.

The contraction seen in July was attributed to the recent contraction in global trade, with demand from the key US and European markets slowing down. The international uncertainty caused by the UK's Brexit vote has further muddied the waters.

SC Ralhan, president of the Federation of Indian Export Organizations, said: "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."