NEW DELHI: After recording a positive growth of six per cent in September, India’s exports have declined 5.4 per cent to $ 24.82 billion in October. Lower shipments in petroleum products, gems & jewellery and leather dragged down exports in the festive month.
To compound the problem, most of the exports which grew were raw materials, while exports of manufactures such as leather goods, petroleum products, gems and jewellery, engineering products, textiles and electronics shrank.
The top five commodities whose exports grew the most in October were : Other Cereals (369.30 per cent), Rice (112.15 per cent), Oil meals (76.62 per cent), Iron Ore (73.89 per cent) and Oil Seeds (54.06 per cent). “The fact that our exports growth is mostly from the sale of raw material is a worrying factor, it means we are not adding value to those goods here.
That’s happening somewhere else,” noted Prof Biswajit Dhar of the JNU and Member of the Board of Trade. Meanwhile, imports in October declined 11.56 per cent to $33.6 billion, narrowing the trade deficit to $8.78 billion. “India was thus a net importer in October 2020 with a trade deficit of $8.78 billion, as compared to a trade deficit of $11.76 billion, an improvement by 25.34 per cent,” the commerce Ministry said in a statement.
According to Sharad Kumar Saraf, President of the Federation of Indian Export Organisations (FIEO), “though the monthly exports have shown a negative growth, there are signs of revival as both order booking position and Manufacturing PMI have risen.” He added that the exporters were hamstrung by “a huge container shortage and hike in sea freight”. Analysts pointed out that the government would have to address issues of market access, refunds of embedded taxes which is allowed by WTO and ease flow of export financing besides reducing cost of funds to boost exports.