Exports enter negative terrain in October as trade deficit widens
Exports entered the negative terrain after over an year, contracting 1.12 per cent in October primarily due to liquidity problem being faced by exporters following rollout of the Goods and Services Tax.
The trade deficit widened to almost three-year high of $ 14 billion during the last month as against $ 11.13 billion in October 2016 as imports surged. The exports dipped to $ 23.09 billion in October from $ 23.36 billion in the same month last year. Last time it was in August 2016 when the shipments were in the red, reports PTI.
Overseas shipments of several key sectors such as textiles, pharmaceuticals, leather and gems and jewellery recorded negative growth last month. 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. "There is an immediate need for remedial measures to prevent further decline in exports otherwise the situation may be worse for November," the Federation of Indian Export Organisations (FIEO) said in a statement. It added that implementation of the measures approved by the GST Council is not taking place as a result challenges faced by exporters remain the same. Imports, however, grew by 7.6 per cent to USD 37.11 billion in October from USD 34.5 billion in the year-ago month, the commerce ministry data released today showed.
Gold imports dipped by 16 per cent to USD 2.94 billion last month. Oil and non-oil imports grew by 27.89 per cent and 2.19 per cent to USD 9.28 billion and USD 27.83 billion, respectively in October. Cumulative exports during April-October 2017-18 increased by 9.62 per cent to USD 170.28 billion, while imports grew by 22.21 per cent to USD 256.43 billion, leaving a trade deficit of USD 86.14 billion.
The trade deficit widened to almost three-year high of $ 14 billion during the last month as against $ 11.13 billion in October 2016 as imports surged.The exports dipped to $ 23.09 billion in October from $ 23.36 billion in the same month last year.