Exporters have blamed the implementation of the Goods and Services Tax (GST) that has “squeezed’’ the working capital for exporters for the decline. This brings to an end a 13-month run of continuous increase in exports. Imports, on the other hand, increased 7.6 per cent during the month to $37.11 billion (₹2,41,562.31 crore) with coal, project goods, machinery and chemicals posting an increase. Import of gold and transport equipment, however, registered a decline.
Trade deficit in October widened to $14 billion compared to a deficit of $11.13 billion in October 2016.
“The fall in exports was expected as exporters, particularly the micro, small and medium enterprises, were facing liquidity problem to pay GST for four months in a row without getting any refund,” said Ganesh Kumar Gupta, President, Federation of Indian Export Organisations.
Gupta said that it was worrisome that labour-intensive sectors such as gems and jewellery, garments, handicrafts and leather products were the worst affected and the government needs to take remedial measures to prevent a further decline.
While engineering goods, one of the top exports from India, continued to increase, there was a slowdown in pace. “The setback can be traced to disruptions due to roll out of the GST that resulted in squeezing of working capital for exporters.
There is no other plausible reason for the exports to fall in the midst of recovery in the global markets which was so evident in the previous months,” said TS Bhasin, Chairman, Engineering Exports Promotion Council.
Total exports in the April-October 2017-18 increased 9.62 per cent to $170.28 billion. Total imports during the seven-month period increased 22.21 per cent to $256.43 billion.
Overall trade deficit for April-October 2017-18 was $52.55 billion compared to $22.13 billion in April-October 2016-17.