India’s exports fell for a sixth month in a row, with shipments declining 1.6 per cent to $23.25 billion in October compared with $23.6 billion in the same month last year. Demand slowdown persisted in developed markets. Increased oil purchases led to a 7.4 per cent increase in imports to $44.2 billion during the month, against $41.2 billion in the year-ago period, leaving the trade deficit at a record high of $21 billion (Rs 1.14 lakh crore).
The commerce ministry is conducting a detailed review of key export-oriented sectors, to consider incentives for lifting the sagging trade.
“The review would be concluded in the next two days. We will then see if there is a need to fine-tune this year’s foreign trade policy or specific steps need to be taken to improve export performance,” said S R Rao, commerce secretary.
One ray of hope is an improvement from July, when exports had posted a record fall of 15 per cent.
Rafeeque Ahmed, president, Federation of Indian Exports Organisation, said the relative arrest of the decline shown in October exports points to recovery. He said the fall was primarily due to a slowing of domestic manufacturing. Industrial production in September dipped 0.4 per cent. “We would be seeing positive growth in exports from next month, which may show double-digit growth from January or even earlier,” he added.
Commerce department figures show while exports shrunk 6.2 per cent to $166.9 billion between April and October this year, imports during the period dipped a meagre 2.7 per cent, widening the trade deficit to $110.2 billion (Rs 6 lakh crore).
Rao said the increase in imports after four months of decline was largely due to a rise in demand for gold and petroleum products.
While gold imports have increased because of festive demand, oil imports have risen due to higher prices and increased purchases for captive power generation, particularly in Tamil Nadu, Andhra Pradesh and West Bengal.
Oil imports in October increased to $14.8 billion, about 31.6 per cent more than the year-ago period. Non-oil imports declined 1.7 per cent to $29.4 billion. During the first seven months of the financial year, oil imports grew 10 per cent to $95.5 billion from $86.8 billion in the corresponding period of last year. Non-oil imports during the period dipped 8.2 per cent to $181.6 billion.