Exports slipped back into the negative territory in October, declining 5.4 per cent (year-on-year) to $24.82 billion. The number was pulled down by key sectors such as petroleum, gems and jewellery, leather and leather products, yarns, fibre and made-ups, engineering goods and electronics.
Non-petroleum exports, however, grew for the second consecutive month, rising 1.84 per cent to $23.21 billion. The top five sectors that recorded growth include cereals, rice, oil meals, iron ore and oilseeds.
In September, exports had risen 5.99 per cent to $27.58 billion, after falling for six months in a row, raising prospects of a recovery. However, a second wave of Covid-19 breaking out in several regions across the world appears to have put paid to these hopes.
In October, imports were lower by 11.56 per cent at $33.6 billion, leading to a trade deficit of $8.78 billion compared with $11.76 billion in October 2019, according to preliminary data released by the Commerce Department on Tuesday.
While exporters across sectors are hoping the pandemic will abate soon, many are optimistic that if certain glitches such as the lack of availability of containers and the uncertainty over export incentives, are addressed, it will give them a much-needed boost.
“We hope it (the decline in exports in October) does not form a trend line in the midst of a serious second wave of coronavirus in several countries of Europe, including the UK, Germany and France. With several of these economies being subject to yet another lockdown, we may see headwinds buffeting global trade,” said Mahesh Prasad, Chairman, Engineering Export Promotion Council.
The nominal decline in exports was mainly because of huge shortage of containers and hike in sea freight, which have particularly hit exporters which had negotiated on CIF (cost, insurance and freight) or C&F (clearing and forwarding) basis, said Sharad Kumar Saraf, President, Federation of Indian Export Organisations.
Orders improve
“Encouragingly, non-oil merchandise exports continued to grow for the second consecutive month, although the pace moderated following a resurgence of Covid-19 infections in many trading partner countries. The renewed lockdown in some advanced economies will severely test the durability of the uptrend in non-oil merchandise exports in the ongoing month,” according to Aditi Nayar, Principal Economist, ICRA Ltd.
The Commerce Ministry is likely to come up with a detailed and precise trade data for October later this month. The government used to come up with estimates for a month only by the middle of the following month, but the Ministry unveiled September data early, after export numbers turned positive.
Silver, newsprint, cotton raw and waste, pulses and transport equipment posted the sharpest decline in imports in October. Gold import increased 35.88 per cent to $660 million, as per the data.
Exports during April-October 2020-21 declined 19.05 per cent to $150.07 billion compared to the same period last fiscal. Imports, at $182.29 billion, were 36.28 per cent lower than the first seven months of 2019-20.