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Exports contract marginally to USD 25.98 billion in November

The trade deficit during November 2018 was USD 17.58 billion. Oil imports during the month under review were USD 11.06 billion, 18.17 per cent lower year on year.

ET Bureau|
Updated: Dec 14, 2019, 07.20 AM IST
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Gold imports were estimated at USD 2.94 billion, up 6.59 per cent from USD 2.76 billion earlier.
NEW DELHI: The pace of decline in India’s exports slowed in November on higher outward shipments of electronic products, drugs and engineering goods although imports continued to decline, indicating weakness in domestic demand.

November exports were down 0.34% to $25.98 billion from a year earlier and imports fell 12.7% to $38.11 billion, leaving a trade deficit of $12.12 billion compared with $17.58 billion a year ago and $11 billion in October, according to official data released by the commerce and industry ministry on Friday.

Exports contracted 1.11% in October and 6.5% in September.

Electronic goods, drugs & pharmaceuticals, engineering goods and chemicals were the major commodity groups with growth in exports, while outbound shipments of most labourintensive sectors including leather, gems & jewellery, carpets and readymade garments fell.

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“Both domestic and global factors have led to this decline in exports. Prolonged trade tensions and protectionism, along with sluggishness in economies across the globe, have further added to the woes of India’s exports sector,” said Sharad Kumar Saraf, president of the Federation of Indian Export Organisations.

Exports in the April-November period shrank 1.99% to $211.93 billion, while imports were down 8.91% to $318.78 billion, leaving a trade deficit of $106.84 billion in the first eight months of the financial year.

Achieving the target of $350 billion in exports for this financial year appears challenging now, FIEO said, citing domestic issues including uncertainty over the Merchandise Export from India Scheme as a major cause of concern as claims by exporters were pending for four months, wiping out their liquidity.

Only 13 of the 30 exporting sectors showed growth in November.

“Though engineering exports have put up a reasonably good show with 6.32% growth, the overall external trade environment remains challenging and subdued,” said EEPC India Chairman Ravi Sehgal, citing the high cost of steel, a basic raw material, which exporters have taken up with the government.

IMPORT WORRIES
Imports have contracted for three months in a row.

Oil imports in November fell 18.17% on year to $11.06 billion. Another large component of imports, electronics, fell 3.98% to $4.2 billion. However, gold imports were up 6.59% to $2.94 billion.

Non-oil, non-gold imports, an indicator of domestic demand, fell 11.96%, driven by industrial inputs such as iron and steel, coal, minerals and ores, and metals, transport equipment, electronic goods and silver.

According to Aditi Nayar, principal economist at ICRA, imports recording a substantial contraction on account of oil, transport equipment as well as a variety of other items, underscore both subdued commodity prices and weak demand conditions in the economy.

“The pickup in gold imports is likely to reflect restocking amid the festive and marriage season, benefitting from some softening in global gold prices, and its sustainability remains to be seen,” Nayar said.

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