October exports drop 16.65%, deficit rises 50%

Imports rise 5.7%, but touched an eight-month low at $56.7 billion

The global slowdown has begun to hit home, denting India’s goods exports by 16.65% in October compared to a year ago — the first contraction since February 2021 that dragged outbound shipments below $30 billion for the first time in 20 months.

Imports grew 5.7% year-on-year to $56.7 billion, which marked the lowest merchandise import bill in eight months, possibly due to softening commodity prices.

The trade deficit for the month surged 50.25% to $26.91 billion, as per data released by the Commerce Ministry on Tuesday. October’s deficit was about 4.7% higher than September 2022 and was the fourth successive month of an over $25 billion gap between goods imports and exports.

The decline in exports was broad-based across sectors with just a handful of segments reporting an uptick in shipments, including electronic goods which grew almost 38% to $1.8 billion

Engineering goods, a mainstay of India’s exports in recent years, dropped over 21% to $7.4 billion, with the Ministry stating that the $2 billion drop ‘includes steel and its products’, signalling that the export tax on iron and steel is hurting these exports.

Exports from major job-intensive sectors such as readymade garments and gems and jewellery dropped over 21%, while cotton yarn, handlooms and handicraft products nearly halved from a year ago.