EXPORTS FALL 1.1% IN OCT, TRADE DEFICIT AT 35MTH HIGH

NEW DELHI: India’s merchandise exports declined for the first time in 14 months in October as exporters struggled with a liquidity crunch because of delayed refunds under the goods and services tax (GST) regime, leading to the highest trade deficit in 35 months. Data released by the commerce ministry on Tuesday showed 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.

The decline had been expected because exporters, particularly micro, small and medium enterprises (MSME), were facing liquidity problem after paying GST for four months in a row without getting any refund, said Ganesh Kumar Gupta, president of the Federation of Indian Export Organisations (FIEO).

Gupta said exports should be kept out of the purview of GST as paying the tax first and getting a refund was cumbersome, complicated, affecting exports.

In October, exports of chemicals (22.3%), engineering goods (11.8%) and petroleum products (3.2%) rose while shipments of ready-made garments (-39.2%) gems and jewellery (-24.5%) and drugs and pharma (-8.8%) fell.

Growth in non-oil, non-gold merchandise imports eased sharply to 4.9% in October, after double-digit growth since March 2017, led by a substantial decline in imports of transport equipment (48%), precious stones (1.6%) and gold (16%). Imports of coal (66.3%), petroleum (27.9%), chemicals (30.5%), plastics (12.2%), iron and steel (20.7%), non-ferrous metals (30.2%), machinery (17.4%), and electronics goods (7%) grew in October.