Exports dominated in November: Buttressed by unraveled GST and spurred Global Demand

After a brief sluggishness during in previous months, exports rose 30.55% to $26.19 billion in
November on account of improved global demand, government incentives and simplification
of GST payment mechanism. Exports had witnessed a decline of 1.12 per cent to $23 billion in
October this year, retreating from a six-month high growth rate in September. India's exports in
November 2016 stood at $20.06 billion. The data released by the commerce ministry also
revealed that imports too grew 19.61 per cent to $40 billion in November from $33.46 billion in
the same month last year. On account of rise in imports, trade deficit increased marginally to
$13.82 billion in November on Year on Year basis.

Ameliorating part of the story is that, the deficit between imports and exports narrowed on
month-on- month basis, indicating a potential rise in demand for Indian products. Further, this
fact could be corroborated in a strengthen manner because, during last month rupee appreciated
continuously against dollar making Indian products expensive, and despite of this India
experienced a major surge in exports.

Oil imports moved up 39.1% to US$ 9.55 billion, while the non-oil imports also surged 14.6% to
US$ 30.47 billion in November 2017 over November 2016. The share of oil imports in total
imports was 23.9% in November 2017, compared with 20.7% in November 2016. India's basket
of crude oil galloped 37.9% to US$ 61.32 per barrel in November 2017 over November 2016.
Among the non-oil imports, the major contributors to the overall rise in imports were pearls,
precious & semi-precious stones imports rising 85.8% to US$ 2.92 billion, electronic goods
25.0% to US$ 4.37 billion, coal, coke & briquettes 51.8% to US$ 2.00 billion, organic &
inorganic chemicals 49.1% to US$ 1.80 billion, electrical & non-electrical machinery 23.2% to
US$ 2.70 billion, non-ferrous metals 42.8% to US$ 1.14 billion and iron & steel 35.8% to US$
1.26 billion.

While analyzing exports, data indicated that the exports of engineering goods recorded an
increase of 43.8% to US$ 7.18 billion, followed by petroleum products 47.7% to US$ 3.59
billion, gems & jewellery 32.7% to US$ 3.36 billion, organic & inorganic chemicals 54.3% to

US$ 1.65 billion, marine products 32.2% to US$ 0.75 billion, and plastic & linoleum 40.9% to
US$ 0.61 billion.
The exports of drugs & pharmaceuticals also surged by 13.4% to US$ 1.44 billion, rice 44.7% to
US$ 0.51 billion and electronic goods 26.1% to US$ 0.58 billion in November 2017.
One obvious reason for this high dollar numbers it that, oil prices increased which is one of the
major reason for higher absolute trade figures, but further to add on, engineering and pharma
goods are more in demand overweighing the rupee dollar mathematics. Also GST mechanism
has assuaged the exporters and pumped in the confidence which has truncated the tax cascading
effect. Thus generating more revenues and reducing the burdens on exporters. Input Tax Credit
(ITC) and Integrated-GST refunds for exporters are being expedited for quick unlocking of their
capital.

Apart from this, the government had announced Rs 8,450 crore incentives for exporters in
sectors like leather and agriculture, earlier this month. This might work as positive catalyst for
making exports figure robust for December’s month. Government has clearly indicated that
export promotion is the focal point, for which the mid-term trade policy has been eased as well.
Due to pacification of the policy, some positive export figures are expected in December as well.