Exports entered the negative terrain after over an year, contracting 1.12 per cent in October primarily due to liquidity problem being faced by exporters following rollout of the Goods and Services Tax. The trade deficit widened to almost three-year high of USD 14 billion during the last month as against USD 11.13 billion in October 2016 as imports surged. The exports dipped to USD 23.09 billion in October from USD 23.36 billion in the same month last year.
Last time it was in August 2016 when the shipments were in the red. Overseas shipments of several key sectors such as textiles, pharmaceuticals, leather and gems and jewellery recorded negative growth last month. Commenting on the data, exporters body FIEO said the fall was expected as exporters were facing liquidity problem to pay GST for four months in a row without getting any refund. "There is an immediate need for remedial measures to prevent further decline in exports otherwise the situation may be worse for November," the Federation of Indian Export Organisations (FIEO) said in a statement. It added that implementation of the measures approved by the GST Council is not taking place as a result challenges faced by exporters remain the same. Imports, however, grew by 7.6 per cent to USD 37.11 billion in October from USD 34.5 billion in the year-ago month, the commerce ministry data released today showed. Gold imports dipped by 16 per cent to USD 2.94 billion last month. Oil and non-oil imports grew by 27.89 per cent and 2.19 per cent to USD 9.28 billion and USD 27.83 billion, respectively in October. Cumulative exports during April-October 2017-18 increased by 9.62 per cent to USD 170.28 billion, while imports grew by 22.21 per cent to USD 256.43 billion, leaving a trade deficit of USD 86.14 billion. In October, petroleum, engineering and chemicals exports grew by 14.74 per cent, 11.77 per cent and 22.29 per cent, respectively. India's export had soared by 25.67 per cent to USD 28.61 billion in September, logging its highest growth in last six months on the back of expansion in shipments of chemicals, petroleum and engineering products.
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