India records trade deficit of $98.52 billion in April to October period

India recorded a trade deficit of $98.52 billion in the April-to-October period this fiscal, compared to $34.05 billion in the same period last year. The trade deficit for October was $26.91 billion compared to last year's $17.91 billion, as per official data.

Trade deficit is the amount by which a country's import costs exceed its export value in a given period.

India also recorded a decline in exports, excluding petroleum, gems and jewellery. It reported a $23.4 billion rise in petroleum product exports in the April to October period. "The $49 billion rise in petroleum imports during the April to October period compared to last year reflects booming transport," Commerce Secretary Sunil Barthwal said.

He also said the 54 percent export rise in electronic goods resonates with India getting into high-tech sectors. He said the duty on steel goods affected the export of engineering goods.

Barthwal said the duty on iron ore and reduced demand for cotton led to the decline in exports from April to October 2022 to $6.5 billion.

The import of pulses declined by $4 billion compared to last year due to rise in local population, he said.

The production-linked incentive schemes in the pharma sector is reflecting in reduced trade imports, according to trade data, he said.

The commerce ministry said merchandise trade volumes are expected to grow by 3.5 percent. Barthwal said India's merchandise trade share is 1.8 percent in terms of global exports, which has a huge scope for improvement. He said the services exports are better than merchandise exports, 4 percent of world's exports.

The commerce secretary said that prior to September 2020, there used to be monthly trade data. "It was thought that 98-99 percent data is digitally available in the first few days of a month, which led to the change.  It was showing 1.5 percentfall in exports, but in middle it started showing rise in exports. To avoid confusion in data, reverted to earlier practice of monthly release of data," he said.

Barthwal said that once India gets all data digitally, it will start putting it out in the first week of the next month.

He said the last forecast was a 3.5 percent growth in trade, and the WTO's next year's growth forecast is 1 percent. WTO trade forecast for next year is positive for Latin American countries, he added.

Barthwal said that the GDP forecast by IMF was down for most developed nations. "Monetary policy was tightened in most of developed world which slowed down consumption. There will be headwinds for us, it will impact our export," he said.

Talking about India being one of the fastest growing and largest economies, he said that as consumption data goes up, a country-by-country analysis would be required for better export planning. He said India's consumption basket is going to increase. "If consumption rises in auto sector, demand for petroleum products will rise with it," he said.

Barthwal also said that seasonality is also important to look at while analysing data. He said fertiliser imports would increase if the rabi sowing season starts earlier. "During Diwali, USD 4 billion of change in trade was reported. Seasonality important to look at while analysing data," he said.

The commerce secretary said that the imports have slowed down due to China's tight COVID-19 policy. The technical barriers led to fall in exports in China. "Shrimp exporters said even the slightest trace of COVID leads to fewer exports to China," he said.

He said the Reserve Bank of India has allowed rupee trade, which permits trade from anywhere. "If there's balance of trade, rupee trade can flourish," he said, adding that meetings have been held with RBI, UCO Bank and DFS on promoting rupee trade with Russia.

"We want to promote Rupee trade in national interest. Foreign bank has to open vostro account with Indian bank for rupee trade.  Speaking to export promotion councils and importers have to put money in the trade account," he said. Emphasizing on waiting a while,, he said that he was sure the RBI and DFS guidelines will ease rupee trade.

IndusInd Bank, UCO Bank and six Russian banks have opened vostro accounts. At present, rupee trade is with Russia only. "We are educating our importers, talking to DFS to expedite rupee trade," he said, adding that some trade is happening in USD too. If banks get higher exposure to US-type of system, they're apprehensive of sanctions, he said.