Country’s exports entered the negative zone after a gap of six months, declining 5.04 per cent in October due to a dip in shipments from major sectors such as engineering, pharma and gems and jewellery.
Gold imports, which jumped manifold to % 4.17 billion, increased the trade deficit to $ 13.35 billion during the month as against $ 10.59 billion in October 2013.
However, the trade gap is lower than the previous month when it was $ 14.24 billion. It was in March that exports growth was in negative zone last time, when shipments had declined by 3.15 per cent.
Exporters attributed the dip in exports in October to subdued demand in the US and European markets. Expressing disappointment over the exports figure of October, exporters' body FIEO President M Rafeeque Ahmed said: "While we were conscious of challenges in emerging global scenario, we expected atleast modest growth of single digit".
Ahmed said the Government should immediately re-introduce interest subvention on exports from April 2014 as banks have stopped passing interest subsidy to exporters especially those in the MSME sector thereby raising cost by 3 per cent. Moreover, he said, banks have started recovering the same in absence of any communication from the RBI or the government."
Meanwhile, RB said it is in discussions with the Government to curb gold imports which have seen a sharp surge in the recent months putting pressure on the Current Account Deficit.
"With the surge in gold import which has been witnessed, it warranted a relook. Discussions are still going on between the Reserve Bank of India and the Government of India. Once we know what are the discussions, further view will be taken," RBI Deputy Governor SS Mundra said here.