Indian exports dip in October at $23 bn, trade deficit up

Cornelia Mascio
Novembre 15, 2017

The decline was led by sharp falls in major labour-intensive sectors such as leather & leather products, gems & jewellery, handicrafts, readymade garments, and carpets.

Imports, however, grew by 7.6 per cent to United States dollars 37.11 billion in October from USD 34.5 billion in the year-ago month, the commerce ministry data released today showed.

Consequently, India's trade deficit widened to $14 billion during the month, as against $11.13 billion in October previous year. Imports, on the other hand, increased 7.6 per cent during the month to $37.11 billion (₹2,41,562.31 crore) with coal, project goods, machinery and chemicals posting an increase.

"The refund of inputs tax credit under the new Goods and Service Tax system has been stuck since July, hitting exports", Ganesh Kumar Gupta, president of Federation of Indian Export Organisations, said.

"Implementation of the measures approved by GST Council is not taking place as a result challenges faced by the exporters remain the same", added FIEO chief.

He noted that WTO's latest World Trade Outlook Indicator (WTO) also suggests that global merchandise trade growth will likely moderate in the fourth quarter of 2017.

Commenting on the data, exporters body FIEO said the fall was expected as exporters were facing liquidity problem to pay GST for four months in a row without getting any refund. Rising crude oil prices led to the oil import bill rising 27.9 per cent in the month, from an 18.5 per cent rise in September.

Segment-wise, the data showed that India's oil imports during October shot up by 27.89 per cent to $9.29 billion, from $726 billion in the same month past year.

"Though the merchandise trade deficit rose sharply in October, it may not be a source of alarm", Principal Economist at Icra, Aditi Nayar, was quoted as saying.

Exports of plastic and linoleum (24.5%), chemicals (22.3%), petroleum products (14.7%), engineering goods (11.7%) and marine products (8.52%) grew.

The rising oil imports come at a time when the worldwide crude oil prices are surging each day, pushing even fuel prices at home higher.

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