NEW DELHI: India’s merchandise exports contracted by 5.12 per cent to $24.89 billion during the month of October, and by a massive 19.02 per cent to $150.14 billion for the April-October period. The export dip in October comes despite India having managed to show export growth in September, which had been seen as part of a revival trend for the Indian economy.
But, lower demand for engineering goods, electronics, petroleum products, and gems and jewellery shipped out of India saw exports trail in the month of October, analysts say. “The global economy is yet to really get over the pandemic, so despite the good showing in September, it was expected that our exports would continue to flounder, especially that of value-added products,” said Prof Biswajit Dhar of JNU, member of the Board of Trade.
He added, “raw materials like rice, iron ore will find buyers as countries like China and Vietnam get their industries under stream, but our manufactures may continue to face headwinds through the year.”
“It will take time for the global trade world to recover, we cannot expect our exports to cushion our revival story. That will have to be crafted by boosting domestic investment and demand,” Dhar pointed out.
The IMF has projected a 10.4 per cent contraction in global trade besides a shrinking of the global economy by 4.4 per cent in 2020. As imports also contracted by 11.53 per cent with India importing less transport equipment, petroleum goods, and machinery, the country’s trade deficit for October narrowed to $8.71 billion, showed commerce ministry data.
A separate set of data released by RBI showed that India’s much flaunted services exports also fell in September by 1.4 per cent to $17.29 billion. By extrapolating the data for October, the Commerce Ministry said that for the April-October period, services exports—which includes software and banking—declined by 7.86 per cent to $ 114.96 billion.
Overall exports, which includes both merchandise exports and services, declined by 14.53 per cent to $265.09 billion during the April-October period. The overall trade yielded India a small surplus of around $16.52 billion.