India's export drops; trade deficit widens to $14 billion in October

India’s exports fell 1.1% in October to $23.1 billion while imports expanded at the slowest pace in 10 months at 7.6% to $37.1 billion. India’s trade deficit in the month was $14 billion

India’s exports fell 1.1% in October to $23.1 billion while imports expanded at the slowest pace in 10 months at 7.6% to $37.1 billion. India’s trade deficit in the month was $14 billion

Twelve of the 30 major export groups registered a decline in October, including labour-intensive sectors such as gems and jewellery (-24.51%), readymade garments (-39.23%), carpets (-31.32), handicrafts (-9.08%), manmade yarn/made-ups (-5.91%), and leather items (-9.81%).

India's trade deficit widened to its highest in 35 months in October as merchandise exports declined for the first time in 14 months, government data showed. The data shows oil and non-oil imports grew by 27.89 per cent and 2.19 per cent to $9.28 billion and $27.83 billion, respectively in October. Following an increase of 12.72 percent, exports increased to $1.88 billion in October 2017 from $1.675 billion a month before while imports after a growth of 10.19 percent, increased to $4.929 billion in October 2017 from $4.47 billion in September 2017. "Otherwise, there is no other plausible reason for the exports to fall in the midst of recovery in the global markets which was so evident in the previous months".

While petroleum exports in October grew by 14.74 per cent, engineering was up 11.77 per cent and chemicals exports rose 22.29 per cent. He added that EEPC hoped that the new refund regime for the exporters worked well.

Exports entered the negative terrain after over an year, contracting 1.12 per cent in October primarily due to liquidity problem being faced by exporters following rollout of the Goods and Services Tax.

Ironically, exports fell in a month when the GST Council addressed most of the complaints of exporters, though one important measure, e-wallets, would kick in only by the next financial year. He added that exports should be kept out of the purview of GST as paying the tax first and getting refund later is cumbersome, in turn affecting exports. Merchandise exports for October fell 1.12 percent from a year ago to $23.1 billion.

Growth in the Index of Industrial Production (IIP) slowed to 3.8 per cent in September, from 4.5 per cent in August.

Overall trade deficit for April-October 2017-18 was $52.55 billion compared to $22.13 billion in April-October 2016-17.

Oil and non-oil imports grew by 27.89 per cent and 2.19 per cent to $9.28 billion and $27.83 billion, respectively in October. It had stood at almost $9 billion in September and $11.1 billion in the year-ago period.