Exports contract 1.63% in Oct; trade deficit hits record high at $20.96 bn
India's exports continued to decline for the sixth month in a row, contracting 1.63 per cent to $23.24 billion in October due to subdued demand from key global markets.
Imports, however, grew by 7.37 per cent to $44.20 billion from $41.17 billion in October 2011, resulting in a staggering trade deficit of $20.96 billion for the month, largely driven by crude and oil imports. In September, exports had contracted 10.78 per cent.
The decline in the country's exports comes amid the economic growth slipping to 5.5 per cent in the first quarter of this fiscal and a contracting industrial output. The cumulative exports growth for the April-October period contracted 6.18 per cent at $166.92 billion as against $177.91 billion witnessed during the same period last fiscal. Imports, meanwhile, shrank 2.66 per cent during the April-October period and stood at $277.13 billion as against $284.72 billion in the corresponding year-ago period.
Commerce secretary SR Rao said that the whopping trade deficit was due to large crude and oil imports. Also, October saw a sudden spurt in import of gold though for the seven month period, the gold imports have fallen. "In October, our exports performance has slightly improved," Rao added. However, he said that as the world trade is continuously contracting, it will have an impact on India's trade.
Reacting to the export numbers, Rafeeque Ahmed, president of exporters body FIEO, said "trade deficit is highest in recent times due to hike in oil imports".
Oil imports were up 30 per cent year-on-year during the month.