Trade deficit worsens to $8.7 billion in October

The country's merchandise trade deficit worsened to $8.7 billion in October 2020 from $2.7 billion in the preceding month.

Exports declined 5.1 per cent YoY to $24.9 billion in October. Exports had recovered in September with a 5.9 per cent YoY increase after six months of consistent decline.

Sharp fall in petroleum, oil & lubricants (POL) exports was the main cause of the overall decline. Such exports declined by 52 per cent to $1.7 billion during the month.

Non-POL exports recorded an increase for the second successive month. Exports were up by two per cent in October. At $23.2 billion, non-POL exports recovered to pre-lockdown levels.

Imports declined for eighth straight month, recording a fall of 11.5 per cent. In October, imports amounted to $33.6 billion, well below the average monthly imports of $40 billion recorded during the pre-lockdown period.

POL imports declined by 38.5 per cent. POL imports have stagnated in the range of $5-7 billion since June 2020 against pre-lockdown imports of over $10 billion. India imports both crude oil and petroleum products.

Decline in imports can be attributed to a fall in POL as well as non-POL imports. Total non-POL imports declined by 2.2 per cent although it had declined 14.4 per cent in the last month on yearly basis. Imports of edible oil, chemical material & products, electronic goods, pearls, precious & semi-precious stones increased. Imports of coal, coke & briquettes, transport equipment and machine tools declined in October 2020.