India's exports dip 5.4% in October, trade deficit narrows to $8.78 billion

After recording positive growth in September, India's exports declined 5.4 percent to $24.82 billion in October on account of dip in shipments of petroleum products, gems and jewellery, leather, and engineering goods.

Trade deficit in October narrowed to $8.78 billion as against $11.76 billion, as imports also fell 11.56 percent to $33.6 billion during the month under review.

"India's merchandise exports in October 2020 were $24.82 billion, as compared to $26.23 billion in October 2019, showing a fall of 5.4 percent," the Commerce and Industry Ministry said in a statement. Major export commodities which recorded negative growth during October included petroleum products(53.30 percent), cashew (21.57 percent), gems and jewellery (21.27 percent), leather (16.69 percent), man-made yarn/fabrics/made-ups (12.82 percent), electronic goods(9.40 percent), coffee(9.25 percent), marine products(8.09 percent) and engineering goods (3.84 percent).

Sectors which showed positive growth included rice, oil meals, iron ore, oil seeds, carpet, pharmaceuticals, spices, cotton and chemicals. During April-October 2020, exports declined 19.05 percent to $150.07 billion, while imports fell 36.28 percent over the same period last year to $182.29 billion.

Oil imports dipped 38.52 percent to $5.98 billion in October. During April-October, it declined 49.5 percent to $37.84 billion. After contracting for six straight months, India's exports rose 5.99 percent to $27.58 billion in September. After contracting for six straight months, India's exports rose 5.99 percent to $27.58 billion in September.

Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said the nominal decline in exports during the month was mainly because of huge container shortage and hike in sea freight, which upset exports, particularly for those who have negotiated on CIF (Cost, Insurance, Freight) or C&F (Cost and Freight) basis. Besides, farmers' agitation in some of the hinterland states also affected exports during October, he said.

"…as the election process gets over in the US, with the upcoming Christmas and New Year season, both global and Indian economy are slated for economic revival. Exporters have continuously been receiving a lot of enquiries and orders, further adding to the positive sentiments with signals of further resilience in the global supply chain," he added.

Mohit Singla, founder chairman, Trade Promotion Council of India (TPCI), said agri and food commodities recorded positive growth, which depicts continuity of demand of Indian food and agri products globally, despite other traditional products slipping in demand.

"The time has come for India to be the global food basket of the world, as India has witnessed two bumper crop harvest and Indian industry is already capitalizing the advantage fully despite tough times," Singla added.