Af­ter 13-month re­cov­ery, ex­ports fall in Oc­to­ber

Drop 1.12% to $23 bn; trade deficit bal­loons to 3-year high


Ex­ports con­tracted 1.1 per cent in Oc­to­ber year-on-year to $23.1 bil­lion, the first fall in 14 months, as com­pa­nies con­tin­ued to strug­gle with is­sues re­lated to the goods and ser­vices tax (GST).

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

Ex­porters had ear­lier warned that the dou­ble-digit growth in out­bound ship­ment be­tween July and Septem­ber de­spite roll-out of the GST might not present a true pic­ture, as there were ad­vance or­ders. Ex­ports had soared by 25.7 per cent to $28.6 bil­lion in Septem­ber, its high­est growth in six months, with ex­pan­sion in ship­ment of chem­i­cals, petroleum, and en­gi­neer­ing prod­ucts.

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. Ex­porters grouse that the mea­sures aren’t be­ing im­ple­mented at the ground level.

The lat­est trade in­di­ca­tor re­leased by the world trade out­look in­di­ca­tor of the World Trade Or­ga­ni­za­tion shows that the global trade growth will slow down in the fourth quar­ter of 2017 (Oc­to­berDe­cem­ber), com­pared to the pre­vi­ous three quar­ters. This may have also af­fected the coun­try’s ex­ports to an ex­tent.

Im­ports in Oc­to­ber rose 7.6 per cent, to $37.1 bil­lion. In­creas­ing 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. De­spite to­tal im­ports grow­ing by the slow­est pace this calendar year, the trade deficit in­creased to a 35-month high of $14 bil­lion. It had stood at nearly $9 bil­lion in Septem­ber and $11.1 bil­lion in the year-ago pe­riod.

Gold im­ports dipped 16 per cent to $2.9 bil­lion last month. Aditi Na­yar, prin­ci­pal economist with rat­ing agency Icra, says: “Gold im­ports con­tracted in Oc­to­ber de­spite on­set of the fes­tive and wed­ding sea­son, given the build-up of sub­stan­tial stocks over the past few months.”

As a re­sult, non-oil/non­gold im­ports rose only 4.9 per cent, sharply lower than the 19.8 per cent in Septem­ber and 20 per cent in Au­gust, in­di­cat­ing in­dus­trial pro­duc­tion would suf­fer again in Oc­to­ber.

A sil­ver lin­ing is that nonoil, non-gold im­ports were led by in­dus­trial in­puts such as coal, or­ganic and in­or­ganic chem­i­cals, ma­chin­ery, non­fer­rous me­tals, iron and steel, and elec­tronic goods.

Cu­mu­la­tive ex­ports dur­ing April- Oc­to­ber (first seven months of this fi­nan­cial year) in­creased by 9.6 per cent to $170.3 bil­lion, while im­ports grew 22.2 per cent to $256.4 bil­lion, leav­ing a trade deficit of $86.1 bil­lion.

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