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A decline in merchandise exports in some sectors led to a contraction in the country’s overall outbound shipments by 16.65% to $29.78 billion in October, while the merchandise trade deficit widened to $26.91 billion from $25.71 billion in the previous month, according to the data released by the commerce ministry on Tuesday.
Imports during October stood at $56.69 billion as against $53.64 billion in October 2021, the data showed.
This year, during April to October the exports witnessed a growth of 12.55% to $263.35 billion while Imports rose 33.12% to $436.81 billion, according to the data.
“Both the merchandise exports and imports moderated on a sequential basis between September 2022 and October 2022, which we believe was driven by a larger number of holidays related to the festive season. As a result, the trade deficit widened in MoM terms during this period, but not alarmingly so, in spite of the large YoY contraction in the merchandise exports figure,”
Aditi Nayar, Chief Economist at ICRA.
“The sequential trend in exports in October 2022 echoes what was recorded in November of 2021, which had seen a later onset of the festive season. As of now, we expect some rebound in exports and imports in November 2022 relative to October 2022, although it may not be as strong as the trend seen between November and December of 2021, given the prevailing global demand concerns,” Nayar added.
The experts say that global inflation, Russia-Ukraine war, simmering China-Taiwan crisis and supply disruptions are hurting economic growth worldwide, leading to poor demand.
Exporters are in the hope that India’s exports growth and are hopeful that the situation would improve in the coming months.
A decline in exports and increase in imports widens trade deficit, putting pressure on the value of domestic currency. It also has implications on jobs.
