India’s merchandise exports slipped into contraction mode in October as global trade continued to struggle under the shadow of the coronavirus pandemic.
Outbound shipments contracted 5.4% from a year earlier to $24.82 billion, after a brief respite in September when exports had shot up 6% to counter a six-month-long contraction.
As per preliminary trade data released by the Commerce and Industry Ministry on Tuesday, imports of goods also cut down by 11.5% last month, , taking the overall imports between April to October to $182.29 billion, 36.3% lower than the same period last year.
Merchandise exports in the first seven months of the current financial year amounted to $150.07 billion, a 19.1% contraction from the year-earlier period.
“The trade data shows the recovery is uneven and fragile as exports declined both sequentially and year-on-year, pointing to a sluggish global recovery.”~Devendra Kumar Pant, Chief economist at India Ratings and Research
Exports of rice (112%), chemicals (73.9%) and drugs and pharmaceuticals (21.8%) recorded the highest growth in October, while transport equipment and petroleum products saw the sharpest declines of (–56.3%) and (-53.3%), respectively.
Among employment-intensive sectors, gems and jewellery and leather also reported contractions of (-21.3%) and (-3.8%), respectively, while export of carpets jumped almost 38% and handicrafts grew by more than 11.3%.
The Federation of Indian Exporters’ Organisations (FIEO) called for “urgent and immediate” action to solve the main problems that led to October’s ‘nominal’ dip. It identified shortage of containers and an increase in sea freight charges as issues that needed immediate attention.
Experts opine that the cause of the drop in exports may be a consequence of the ongoing farmer agitation, with FIEO president Sharad Kumar Saraf attributing part of the decline to the farmers protests in some States.
Mr. Saraf said that exporters were seeing a rise in orders and a further impetus was expected once the U.S. election process concludes, while calling on the government to release merchandise export incentives due to businesses.