The trade deficit widened to nearly three-year high of United States dollars 14 billion during the last month as against USD 11.13 billion in October 2016 as imports surged.
Sharp fall in export of items such as readymade garments, gems and jewellery and leather products has resulted in a 1.2 per cent decline (year-on-year) in exports of goods in October to $23.09 billion. 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. Though IIP is measured in constant prices and trade figures are in current prices, non-oil/non-gold imports give a broad indicator of industrial demand.
Shipments of textiles, pharmaceuticals, leather and gems and jewellery fell, the data showed.
Ironically, exports fell in a month when the GST Council addressed most of the complaints of exporters, though one important measure, e-wallets, would kick in only by the next financial year. The decline in these highly employment-intensive sectors is a worrisome sign, said Mr Gupta.
FIEO president further added that exports should be out rightly kept out of the purview of GST as paying the tax first and getting refund is cumbersome, complex and complicated affecting exports.
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Non-oil imports during October at $27.83 billion grew by 2.19 per cent over non-oil imports of $27.23 billion in October a year ago.
The trade deficit widened to $14.02 billion last month from $8.98 billion in September, data from the Ministry of Commerce and Industry showed.
Rating agency Icra's principal, economist Aditi Nayar said that it is estimate every $1 increase in the price of the Indian crude oil basket would bloat annual net oil imports and the current account deficit by $1.2 billion.
As a result, non-oil/non-gold imports rose only 4.9 per cent, sharply lower than the 19.8 per cent in September and 20 per cent in August, indicating industrial production would suffer again in October.
The rising oil imports come at a time when the global crude oil prices are surging each day, pushing even fuel prices at home higher.
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