India’s merchandise export dipped for the first time in the current fiscal, contracting 5.04 per cent in October, the lowest in seven months. Trade deficit during the month widened to $13.35 billion as against $10.59 billion in October 2013. However, the trade gap is lower than September 2014 when it was $14.24 billion. Exports had contracted by 3.15 per cent during March 2014.
The trade figures come amid improved performance of factory output and declining headline and retail inflation. According to the data released by the commerce ministry, exports during the month stood at $26.09 billion as against $27.48 billion, down 5.04 per cent, as outbound shipment of engineering goods, petroleum products, gems and jewellery and cotton yarn declined. Imports on the other hand grew just 3.62 per cent at $39.45 billion as against $38.07 billion.
Oil imports dipped by 19.2 per cent to $12.36 billion during the month. Gold imports jumped 280.39 per cent to stand at $4.17 billion, threatening to derail the current account deficit. Attributing the decline in exports to subdued demand in the European and Middle Eastern markets, Federation of India Export Organisations president Rafeeque Ahmed said that “the government should immediately re-introduce interest subvention on exports from April 2014 … and uncertainty over new Foreign Trade Policy should be removed.”