Contracting for the third consecutive month, India’s exports fell by 1.1 percent in October. According to data released by the Ministry of Commerce & Industry last week, exports in the month were marginally down to $26.38 billion from $26.67 billion reported for the corresponding period of the previous year. On a sequential basis, however, October exports were higher than $26.03 billion registered in September. Imports too fell for the fifth month in a row by 16.3 percent, leading to a trade deficit of $11 billion.
These external trade figures reflect escalating trade tensions and a slowing global economy. The World Trade Organization has already downgraded its trade growth forecast for 2019 and 2020. It is now expected that global merchandise trade volumes will rise by just 1.2 percent in 2019, against 2.6 percent growth forecast previously in April. The projected increase in 2020 now stands at 2.7 percent, down from the earlier 3 percent. Additionally, the trade organisation has also cautioned that downside risks still remain high.
These forecasts show the need to urgently address the domestic challenges facing the export sector. According to an exporters’ association, issues like uncertainty over MEIS Scheme, which has resulted in pendency of exporters' claim for over three and half months. Also, as their GST and Drawback claims have been held up, the problems have compounded. Similarly, delay in notifying the RoDTEP scheme with new rates for the products could hamper smooth transition to the newly launched scheme.