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India’s exports entered negative territory after a gap of about two years, declining sharply by 16.65 per cent to USD 29.78 billion in October, mainly due to global demand slowdown, even as trade deficit widened to USD 26.91 billion, according to data released by the commerce ministry on Tuesday.
Key export sectors, including gems and jewellery, engineering, petroleum products, ready-made garments of all textiles, chemicals, pharma, marine products, and leather, recorded negative growth during October.
Imports during the month under review rose by about 6 per cent to USD 56.69 billion on account of increase in the inbound shipments of crude oil and certain raw materials such as cotton, fertiliser and machinery. During April-October 2022, exports recorded a growth of 12.55 per cent to USD 263.35 billion.
Imports rose 33.12 per cent to USD 436.81 billion. The merchandise trade deficit for April-October 2022 was estimated at USD 173.46 billion as against USD 94.16 billion in April-October 2021, as per the data. Trade deficit in October 2021 was USD 17.91 billion. Last time it was in November 2020, when exports contracted by 8.74 per cent.
Briefing media, Commerce Secretary Sunil Barthwal said that global headwinds are impacting consumption worldwide and that would have an impact on India’s exports as well.
The World Trade Organisation (WTO) has projected that the global trade growth will rise by 3.5 per cent in 2022 but only one per cent in 2023. India’s share in global merchandise trade is 1.8 per cent and in global services, it is 4 per cent, and there is a lot of potential to increase this, he said.
“We should not be depressed by the WTO forecast,” the secretary said, adding monetary tightening in the US and Europe is impacting demand globally. He also said that a lot of India’s exports have imported inputs like in the pharmaceuticals and there are also some seasonal effects on trade.
According to experts, rising domestic consumption along with economic growth is leading to higher imports, particularly of raw material, capital goods and intermediate products. When asked about the reason for releasing trade data now only once in a month, Barthwal said there were some fluctuations in the data released on first week of a month and then again by middle of that month, and “it was sending very confusing signals to our stake holders, so we decided to release most updated data” once a month.
Export sectors that recorded negative growth included gems and jewellery (21.56 per cent), engineering (21.26 per cent), petroleum products (11.28 per cent), ready-made garments of all textiles (21.16 per cent), chemicals (16.44 per cent), pharma (9.24 per cent), marine products (10.83 per cent), and leather (5.84 per cent).
Sectors that recorded positive growth included oil seeds, oil meals, electronic goods, tobacco, tea, and rice in October. Meanwhile, oil imports rose by 29.1 per cent to USD 15.8 billion. Gold imports, however, declined by 27.47 per cent to USD 3.7 billion during the month. Federation of Indian Export Organisations (FIEO) said that slowdown in merchandise exports is a reflection of toughening global trade conditions amid demand slowdown on account of high inventories, rising inflation, economies entering recession, high volatility in currencies and geopolitical tensions.
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