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Exports lose momentum in October, dip 5.4% after growth in September

Exports lose momentum in October, dip 5.4% after growth in September

India was a net importer in October, with a trade deficit of $8.78 billion. It may be seen as an improvement as trade deficit was higher at $11.76 billion during the same time last year, but that's hardly a solace

India's merchandise exports fell 5.4 per cent to $24.82 billion in October 2020, from $26.23 billion registered in October 2019, preliminary numbers released by the Commerce Ministry shows. The dip in exports has subdued the enthusiasm generated last month when Indian exports in September grew year-on-year for the first time in 2020-21. Exports during April-October 2020-21 were $150.07 billion, a decline of 19.05 per cent over the same period last year.

Goods import too fell during the month under review. The value of India's merchandise imports in October 2020 was $33.6 billion, as compared to $37.99 billion in October 2019, a decline of 11.56 per cent. For the April-October 2020-21 period, imports were $182.29 billion, as compared to $286.07 billion during the same period last year, exhibiting a negative growth of 36.28 per cent. India was thus a net importer in October 2020, with a trade deficit of $8.78 billion. It may be seen as an improvement as trade deficit was higher at $11.76 billion during the same time last year, but that's hardly a solace.

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The positive signals the provisional numbers provide are in the export growth, though marginal, in the non-petroleum and non-gems and jewellery exports. In October 2020, the value of non-petroleum exports was $23.21 billion, registering a positive growth of 1.84 per cent over October 2019. The value of non-petroleum and non-gems and jewellery exports in October 2020 was $20.28 billion, as compared to $19.07 billion in October 2019, registering a positive growth of 6.34 per cent. In October 2020, Oil imports were $5.98 billion, as compared to $9.73 billion in October 2019, a decline by 38.52 per cent. However, non-oil imports in October 2020 were estimated at $27.62 billion, as compared to $28.26 billion in October 2019, showing a decline of just 2.26 per cent. Imports indicate domestic demand and its growth can be seen as a signal of economic revival as significant percentage of imports are raw materials or components that go into production in India.

The ministry release states that the major commodities of export which have recorded positive growth during October 2020 vis-a-vis October 2019 are: other cereals (369.30 per cent); rice (112.15 per cent); oil meals (76.62 per cent); iron ore (73.89 per cent); oil seeds (54.06 per cent); carpet (37.67 per cent); cereal preparations and miscellaneous processed items (36.13 per cent); ceramic products and glassware (34.62 per cent); drugs and pharmaceuticals (21.82 per cent); spices (21.61 per cent); jute mfg. including floor covering (18.76 per cent); meat, dairy and poultry products (16.65 per cent); handicrafts excluding handmade carpets (11.37 per cent); fruits and vegetables (8.92 per cent); mica, coal and other ores, minerals, including process (7.68 per cent); cotton yarn, fabrics, made-ups, handloom products, etc. (6.52 per cent); rmg of all textiles (6.31 per cent); tobacco (4.34 per cent); organic and inorganic chemicals (1.91 per cent); tea (0.14 per cent).

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Major commodities of export which have recorded negative growth during October 2020 vis-a-vis October 2019 are petroleum products (53.30 per cent); cashew (21.57 per cent); gems and jewellery (21.27 per cent); leather and leather manufactures (16.69 per cent); man-made yarn, fabrics, made-ups. etc. (12.82 per cent); electronic goods (9.40 per cent); coffee (9.25 per cent); marine products (8.09 per cent); plastic and linoleum (6.88 per cent); engineering goods (3.84 per cent).