After over a year, the country’s exports entered in the negative zone, contracting 1.12 per cent in October. It was primarily due to liquidity problem being faced by exporters following rollout of the Goods and Services Tax.
The trade deficit widened to almost three-year high of $14 billion during the last month as against $11.13 billion in October 2016 as imports surged.
The exports dipped to $23.09 billion in October from $23.36 billion in the same month last year. last time it was in August 2016 when the shipments were in the red. Overseas shipments of several key sectors such as textiles, pharmaceuticals, leather and gems and jewellery recorded negative growth last month.
Commenting on the data, exporters body FIEO said the fall was expected as exporters were facing liquidity problem to pay GST for four months in a row without getting any refund.
“There is an immediate need for remedial measures to prevent further decline in exports otherwise the situation may be worse for November,” the Federation of Indian Export Organisations (FIEO) said in a statement. It added that implementation of the measures approved by the GST Council is not taking place as a result challenges faced by exporters remain the same.