India’s merchandise exports fell 4.83% to $32.11 billion in November. File photo
| Photo Credit: PTI
India’s merchandise exports fell 4.83% in November to a 25-month low of $32.11 billion even as the import bill jumped 27% to a fresh all-time high of almost $70 billion, putting October’s record tally of $66.34 billion in the shade by a wide margin.
The trade deficit also soared to a fresh all-time high of $37.84 billion, reflecting a 77.5% spike over the deficit recorded in November 2023, as per data released by the Ministry of Commerce and Industry. This is the third time in four months that India’s import bill has hit a record high, and the trade deficit has reached significant levels. In August, imports had hit $64.34 billion, which was a record at the time.
Gold imports fuelled the import spike as they hit a fresh peak of $14.9 billion, beating the previous high of $10.1 billion recorded this August.
Commerce Secretary Sunil Barthwal said the import bill surge reflects that India’s economy is growing faster than the world and attributed the dip in merchandise exports to an “unprecedented” fall in prices of petroleum products which have affected India’s oil exports. “Non-petroleum exports have grown at a comfortable pace and that is what we should be looking at,” he said.
Non-petroleum products exports were up 7.8% in November to touch $28.4 billion, while they have risen 7.4% between April and November this year to reach $239.7 billion.
November’s export performance comes after a surprise 17.25% spike in October, the fastest in 28 months, had lifted exports to the year’s second-best tally of $39.2 billion. On a month-on-month basis, November’s exports are 18.1% lower than October.
Petroleum exports in November dropped about 49% but officials said that petroleum products’ export volumes had grown 9.6% between April and October, so the dip in export values is linked to the decline in oil prices alone.
Non-petroleum and services exports are going to sustain in the coming months and will surpass the $800 billion export tally in 2024-25, Mr. Barthwal said.
Services exports, he noted, had hit an all-time high of $34.3 billion in October, and the Ministry reckoned they may have surged further to a record $35.7 billion in November.
ICRA chief economist Aditi Nayar expressed concern at the deficit surging to $37.8 billion in November as compared to the average of $23.5 billion between April and October this year and said the high gold imports were likely driven by festive and wedding-season demand.
“The adverse trade deficit print last month will result in a sharper-than-expected widening in India’s current account deficit in the third quarter of 2024-25, to about 2.8% of GDP as against our earlier expectations of 2%,” she said, stressing this will mark an over two-year high.
Published – December 16, 2024 03:56 pm IST