Merchandise exports declined 16.7% on year in October, the first drop in 20 months and the worst slide since May 2020 when a nation-wide lockdown was imposed to contain the Covid outbreak.
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Official data released on Tuesday showed that exports dropped below the crucial $30-billion mark for the first time since March 2021 to hit $29.8 billion. Imports, however, rose 5.7%, to $56.7 billion.
Consequently, trade deficit inched up to $26.9 billion in October from $25.7 billion in the previous month; but it still remained lower than July’s record level of $30 billion.
The export decline in October was rather broad-based, as 24 of the 30 key segments — including petroleum products, engineering goods, gems and jewellery, textiles and garments, chemicals and pharmaceuticals — witnessed contraction, due to an economic slowdown in key markets that started to weigh down demand. However, the sustained rise in imports, albeit at a slower pace, suggests domestic consumption still remains stronger than in many parts of the world.
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Briefing reporters, commerce secretary Sunil Barthwal said strong external headwinds are impacting consumption worldwide, which would have an impact on India’s exports as well. The aggressive interest rate hikes by the US and Europe to tame runaway inflation there is also weighing down demand for merchandise globally, he suggested. FE
