Early signs of a turnaround are visible in some export sectors such as readymade garments, pharmaceuticals and electronics despite persistent weakness in global trade, the Reserve Bank said on Tuesday.
In the external sector, exports contracted for the 11th month in a row in October, indicating the persisting weakness in global trade, RBI said in its 5th bi-monthly monetary policy review statement in the current fiscal.
“Excluding petroleum products, however, the decline in exports was more moderate and early signs of a turnaround are visible in respect of readymade garments, drugs and pharmaceuticals and electronics,” it said.
These sector together contributes about 14-15% in the country’s total exports. With global commodity prices, especially those of crude, softening further, both petroleum products and non-petroleum products exports continued to contract, it added.
It also said that the decline in bullion imports despite the festival season helped narrow the trade deficit in October as well as over the financial year so far, moderating the current account deficit further.
Further it said that the global trade has slowed further with waning demand and oversupply in several primary commodities and industrial materials. India’s exports remained in the negative territory for the 11th month in a row by registering a dip of 17.53% in October to $21.35 billion.
Exports contracted due to steep decline in shipments of petroleum products (57%), iron ore (85.5%), engineering (11.65%) and gems and jewelery (12.84%) amid a global demand slump. The cumulative exports during April-October this fiscal came down by 17.62% to $154.29 billion as against $187.2 billion in the same period last year.