New Delhi, Nov. 12: Exports fell 1.63 per cent to $23.2 billion in October, widening the trade deficit to $20.96 billion from $18.08 billion in the previous month.
While imports jumped 7.4 per cent to $44.2 billion on account of higher crude oil purchases, weak demand in the US and Europe led to a decline in exports. Prior to this, the highest monthly import was $45.2 billion in May 2011.
Exports in October last year stood at $23.63 billion.
Commerce secretary S. R. Rao said, "World trade is continuously contracting... it will have an impact on India's trade."
The increase in imports is because of the jump in gold and petroleum imports, Rao said.
Rafeeque Ahmed, president of the Federation of Indian Export Organisations, said, "Trade deficit is highest in recent times because of the hike in oil imports."
Oil imports in October increased 31.6 per cent year-on-year to $14.78 billion. However, non-oil imports declined 1.73 per cent to $29.42 billion.
Ahmed saw a silver lining in the export fall being lower in growth terms compared with the precious month. He said the arrest in decline pointed to recovery and the decline in exports in October was mainly on account of a slowdown in domestic manufacturing.
"We will be seeing positive growth in exports from next month which may show double-digit growth from January onwards or even earlier," Ahmed added.
Meanwhile, at the instance of commerce and trade minister Anand Sharma, the directorate general of foreign trade is reviewing the performance of different segments of the export sector.
"The DGFT has done an extensive consultation with all the stakeholders. I think the review will be completed in the next two days," Rao said.
He said after the analysis of the sector, the minister would take a call on whether there was any requirement of a mid-term review of the Foreign Trade Policy and if steps were needed to boost exports.
When asked if government would provide some support to exporters, the secretary said "of course".