Exports dip 8.74 per cent in November; trade deficit narrows to $9.87 billion

Declining for the second straight month, India’s exports dipped 8.74 per cent on a yearly basis in November to USD 23.52 billion on account of contraction in shipments of key sectors like petroleum, engineering, chemicals and gems and jewellery, even as trade deficit narrowed to USD 9.87 billion. Imports declined for the ninth month in a row, slipping 13.32 per cent to USD 33.39 billion in November 2020, government data released on Tuesday showed.

Although the trade deficit in the month narrowed as compared to USD 12.75 billion in November 2019, the deficit (difference between imports and exports) increased sequentially from USD 8.78 billion in October this year. The country’s exports stood at USD 25.77 billion in November 2019.

During April-November 2020-21, exports dropped by 17.76 per cent to USD 173.66 billion, while imports contracted by 33.55 per cent to USD 215.69 billion.

Trade deficit stood at USD 42 billion during the first eight months of the fiscal, as compared to USD 113.42 billion in the same period last year. Oil imports in November tumbled 43.36 per cent to USD 6.27 billion. In the eight-month period, the imports contracted by 48.7 per cent to USD 44.11 billion. Export sectors which recorded negative growth during November include petroleum products (-59.73 per cent), leather (-29.8 per cent), cashew (-24.53 per cent), plastic and linoleum (-23.26 per cent), marine products (-16 per cent), oil seeds (-15.2 per cent), man-made yarn/fabrics/made-ups (-11 per cent), engineering goods (-8.12 per cent), chemicals (-8 per cent), coffee (-1.27 per cent) and readymade textiles (-1.19 per cent).

 However, outbound shipments of oil meals, iron ore, rice, ceramic products and handicrafts recorded positive growth. Gold imports, which have a bearing on trade deficit, grew by about 3 per cent to USD 3 billion. Commenting on the data, Founder Chairman of Trade Promotion Council of India (TPCI) Mohit Singla said the overall de-growth in exports can be largely linked to decline in exports of petroleum products. However, he added that exports of processed food have seen consistent growth.

Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said outbound shipments dipped due to supply-side disruptions, including restricted container movement and declining petroleum exports on the back of crashing prices.

“Besides, farmers’ agitation in some of the hinterland states have also affected exports during the month. Exports have been seeing signs of revival as order booking position has continuously improved and more new orders are in the offing. “Going by this trend, we expect that by the end of 2020-21, overall merchandise exports would touch USD 290 billion,” Saraf said. Prahalathan Iyer, chief general manager, Research & Analysis, India Exim Bank, said Christmas and New Year demand from “our key export markets might bring some positivity in our export growth in December.”

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