Dip in exports has, however, come down from the record fall of 15% in July this year
India's exports fell for the sixth month in a row, with shipments from the country declining by 1.63% to $23.25 billion in October 2012, compared with $23.6 in the same month of last year. The decline came on the back of persistent slowdown in demand in developed markets.
Increased oil purchases led to 7.37% increase in total imports to $44.2 billion during the month, against $41.18 billion in the year ago period, leaving trade deficit at a record high of $20.96 billion.
The commerce ministry is conducting a detailed review of key exports sectors to consider fresh incentives for the industry to lift sagging exports. “The review would be concluded in the next two days. We will then see if there is a need to fine-tune this year's foreign trade policy or whether specific steps need to be taken to improve export performance," said S R Rao, commerce secretary.
The decline in exports, however, has come down from the record fall of 15% posted earlier in July this year. Rafeeque Ahmed, president, Federation of Indian Exports Organisation said that the arrest of decline in exports in October points to recovery. He said that the decline in exports is primarily on account of slowdown in domestic manufacturing.
Industrial production in September dipped by 0.4%. "We would be seeing positive growth in exports from next month which may show double digit growth from January onwards or even earlier," Ahmed added.
According to figures released by the commerce department, while exports from the country shrunk by 6.18% to $166.92 billion between April and October this year, imports during the period dipped by a meager 2.66% widening trade deficit to $110.21 billion.
Rao said the increase in imports after four months of decline was largely due to a rise in demand for gold and petroleum products. While gold imports have increased because of festive demand, oil imports have risen due to higher prices and increased purchases for captive power generation particularly in the states of Tamil Nadu, Andhra Pradesh and West Bengal.
Oil imports in October increased 31.6% to $14.78 billion compared to the year-ago period. Non-oil imports, in the meantime, declined by 1.73% to $29.42 billion. During the first seven months of the fiscal oil imports grew by 10% to $95.5 billion from $86.8 billion in the corresponding period last year. Non-oil imports during the period dipped by 8.22% to $181.56 billion.
Reserve Bank of India today said it there is no need to explain the monetary policy and it stands by monetary policy statement.
finance secretary Arvind Mayaram pegged India's economic growth at 5.8% for 2014-15