India’s merchandise exports in September 2023 witnessed a marginal annual growth of 0.5%, reaching $34.58 billion. This uptick, however, was driven by a weak base (-2.8%) from the previous year. Concurrently, the country’s trade deficit narrowed to a five-month low of $20.78 billion, as import growth remained modest at 1.6%.
A significant factor contributing to the reduced trade deficit was a sharp decline in gold and oil imports. Gold imports in September plummeted to $4.3 billion compared to $10.06 billion in August. Similarly, oil imports dipped 10.4% year-on-year to $12.5 billion due to a sharp fall in global crude oil prices.
While overall merchandise exports for the first six months of the fiscal year were up 1.02% to $213.2 billion, import growth outpaced exports at 6.1%, reaching $350.6 billion.
Sectoral Performance
- Engineering Goods: This sector remained a bright spot, with exports growing 10.5% to $9.8 billion in September.
- Electronics Goods: Exports in this category increased 7.9% to $2 billion.
- Readymade Garments: This sector witnessed a robust 17.3% growth, reaching $1.1 billion.
- Agriculture: Key agricultural exports like rice, tobacco, coffee, and spices recorded significant growth. Rice exports surged 25% to $974 million, while tobacco exports jumped 50% to $206 million. Coffee and spice exports also witnessed impressive growth rates of 74% and 26%, respectively.
Outlook and Challenges
While India’s export performance has been relatively strong compared to the global average, the evolving geopolitical landscape, particularly the conflict in West Asia, poses potential challenges. The Commerce Secretary, Sunil Barthwal, acknowledged the dynamic global scenario and emphasised the need for both short-term and long-term strategies to address potential disruptions.
In terms of services exports, September saw a 7.7% growth to $30.61 billion, while imports increased 18% to $16.32 billion. For the April-September period, services exports were up 9.81% to $180 billion, and imports rose 9.59% to $97.39 billion.
Overall, India’s export-import balance has shown improvement, but sustained growth will depend on various factors, including global economic conditions, geopolitical developments, and domestic policy initiatives.
