India’s efforts to increase exports in the current fiscal year would be hampered by external factors as the geopolitical situation worsens. The conflict in Ukraine is still raging unabatedly as OPEC Plus, the oil cartel, has reduced production to raise crude prices. Most western markets are still experiencing recessionary trends, despite the fact that concerns about a global banking crisis have not subsided since Credit Suisse was acquired. In an effort to control inflation, the US Federal Reserve is continue to raise interest rates aggressively, and central banks in other nations will do the same.
In light of this, the World Trade Organization anticipates a slowdown in trade in 2023. Its most recent predictions state that Following a 2.7% growth in 2022, the volume of merchandise trade will increase by 1.7% in 2019. The main explanations provided for this year’s weak growth include the persistently high inflation as well as the aforementioned external concerns. Due to elevated global commodity prices, tighter monetary policy, and Covid outbreaks that delayed production in China, the increase in trade volume last year was smaller than initially anticipated.
The WTO asserts that the projection for 2023 is primarily based on the same variables that affected output and trade in the previous year. They include escalating geopolitical tensions and weaknesses in banking systems brought on by interest rate increases that, if left uncontrolled, could result in more financial instability.
The result India’s merchandise exports has been impacted by these factors in a way that has limited growth to 7.5% for the time period for which data is available, from April 2022 to February 2023. Over the past 11 months, exports have reached $405.94 billion, up from $377.43 billion over the same time period in the prior year.
