India’s exports dip 5.4 per cent in October, trade deficit narrows to USD 8.78 billion

After recording positive growth in September, India’s exports declined 5.4 per cent to USD 24.82 billion in October on account of dip in shipments of petroleum products, gems and jewellery, leather, and engineering goods.

Trade deficit in October narrowed to USD 8.78 billion as against USD 11.76 billion, as imports also fell 11.56 per cent to USD 33.6 billion during the month under review.

“India’s merchandise exports in October 2020 were USD 24.82 billion, as compared to USD 26.23 billion in October 2019, showing a fall of 5.4 per cent,” the Commerce and Industry Ministry said in a statement.

Major export commodities which recorded negative growth during October included petroleum products (53.30 per cent), cashew (21.57 per cent), gems and jewellery (21.27 per cent), leather (16.69 per cent), man-made yarn/fabrics/made-ups (12.82 per cent), electronic goods (9.40 per cent), coffee (9.25 per cent), marine products (8.09 per cent) and engineering goods  (3.84 per cent).

Sectors which showed positive growth included rice, oil meals, iron ore, oil seeds, carpet, pharmaceuticals, spices, cotton and chemicals.

During April-October 2020, exports declined 19.05 per cent to USD 150.07 billion, while imports fell 36.28 per cent over the same period last year to USD 182.29 billion.

Oil imports dipped 38.52 per cent to USD 5.98 billion in October. During April-October, it declined 49.5 per cent to USD 37.84 billion.

After contracting for six straight months, India’s exports rose 5.99 per cent to USD 27.58 billion in September.

Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said the nominal decline in exports during the month was mainly because of huge container shortage and hike in sea freight, which upset exports, particularly for those who have negotiated on CIF (Cost, Insurance, Freight) or C&F (Cost and Freight) basis.

Besides, farmers’ agitation in some of the hinterland states also affected exports during October, he said.

“...as the election process gets over in the US, with the upcoming Christmas and New Year season, both global and Indian economy are slated for economic revival. Exporters have continuously been receiving a lot of enquiries and orders, further adding to the positive sentiments with signals of further resilience in the global supply chain,” he added.

Mohit Singla, founder chairman, Trade Promotion Council of India (TPCI), said agri and food commodities recorded positive growth, which depicts continuity of demand of Indian food and agri products globally, despite other traditional products slipping in demand.

“The time has come for India to be the global food basket of the world, as India has witnessed two bumper crop harvest and Indian industry is already capitalising the advantage fully despite tough times,” Singla added.