New Delhi: India’s merchandise exports contracted for the eleventh consecutive month in October, as shipments of petroleum products continued to decline on lower crude oil prices, and external demand remained weak amid tepid global economic recovery.
Exports contracted 17.5% from a year ago to $21.3 billion while imports shrank 21.2% to $31.1 billion, leaving a trade deficit of $9.8 billion, data released by the commerce ministry showed on Monday.
In comparison, China’s October exports fell 6.9% from a year ago, down for a fourth month, while imports slipped 18.8%, leaving the country with a record high trade surplus of $61.64 billion.
India’s dip in exports was driven mainly by a 57.1% drop in shipments of petroleum products to $2.5 billion.
The ministry has sent a cabinet note on the long-pending interest subsidy scheme for providing rupee credit to exporters at a subsidized interest rate. However, the cabinet is yet to take a view on it.
India aims to take exports of goods and services to $900 billion by 2020 and raise the country’s share in world exports to 3.5% from 2% now. Exports in the past four fiscal years have been hovering at around $300 billion.
India’s current account deficit (CAD) further contracted in the first quarter of 2015-16, as lower global crude oil prices helped rein in India’s import bill.
In the April-June period, CAD—the sum of the balance of trade and invisibles, such as remittances and software earnings—came in at $6.2 billion, or 1.2% of gross domestic product (GDP), compared with $7.8 billion, or 1.6% of GDP, a year ago, data released by the Reserve Bank of India (RBI) showed last week.