India's Merchandise Exports Drop In October; A Reflection Of Tough Global Conditions, Say Exporters

India's merchandise exports in October declined to $29.78 billion compared to $35.73 billion in the same month last year.

Inbound merchandise shipments in the month under review stood at $56.69 billion as against $ 53.64 billion in October 2021.

Exporters said that the slowdown in merchandise exports is a reflection of tough global trade conditions. They said the fall in exports was due to rising inflation, economies entering a recession, high volatility in currencies, and geopolitical tension.

A Sakthivel, president of the Federation of Indian Export Organisations, said the drop in commodity prices and restrictions on some exports, intending to stem the price increase in the domestic market, also affected the growth numbers.

Non-petroleum and non-gems and jewelry exports in October stood at $ 21.72 billion, a drop from $26.15 billion in October last year.

Non-petroleum, non-gems and jewelry-gold, silver and precious metals-imports were at $34.40 billion, higher than $32.88 billion in the comparable month last year.

India's overall exports, merchandise, and services combined, in October this are estimated to be $58.36 billion, a growth of 4.03 per cent over the same period last year, according to the data released by the government.

Overall imports are estimated to be $73.00 billion, a growth of 11.82 per cent.

Sakthivel said the decline in exports of major labor-intensive sectors is a particular concern. He cited sectors such as engineering goods, apparel and textiles, gems and jewelry, petroleum products, organic and inorganic chemicals, drugs and pharmaceuticals, marine products, and leather and leather products.

"Many agriculture product sectors are of particular concern as these sectors are key to huge employment generation," he added.

The growth in exports of electronic goods on a sustained basis is seen as a good sign.

Oil seeds, oil meals, tobacco, tea, and rice also recorded growth in exports.

For the six months between April and October, overall exports grew 19.56 per cent to $444.74 billion.

Overall imports registered a growth of 33.80 per cent at $ 543.26 billion.

The moderation in merchandise exports and imports on a sequential basis is driven by a larger number of holidays related to the festive season, Aditi Nayar, Chief Economist, ICRA, said.

Aditi Nayar added that the trade deficit widened in month-on-month terms during this period, but not alarmingly, despite the large year-on-year contraction in the merchandise exports.

"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."