India’s exports of ready-to-wear clothing (RMG) and raw textiles fell by 12.1% and 17.5%, respectively, in February of this year. According to the rating agency CRISIL, exports of leather and handicrafts both fell during the month (-28.3% and -14.5%, respectively).

The anticipated slowdown in global economy, which is mostly predicated on lower growth in advanced countries like the United States and the euro area—both of which are important export markets for India—will likely have an adverse effect on exports. Moreover, a slowdown in domestic growth may result in some softerening of imports.

India’s exports of goods decreased by 8.8% YoY to $33.9 billion, while its core (non-oil, non-gold) exports down by 6.4% YoY in February of this year. a huge Oil exports plunged 28.6% YoY, the first annual fall since February 2021, which contributed to the decline in part.

The slowdown in goods exports will continue and could get worse as the impact of tighter monetary policy picks up speed, CRISIL noted, since there appears to be a shift in demand away from goods and towards services, which is less dependent on imports.

The month’s $51.3 billion in merchandise imports decreased by a slightly less dramatic 8.2% YoY. Core imports actually decreased at a considerably slower rate of just 2%, demonstrating the continued resilience of the local economy.

India’s goods trade imbalance increased slightly to $17.4 billion in 2017 as a result of the greater fall in overall exports compared to overall imports. from $16.6 billion in January 2023 to February.

Yet, the merchandise trade imbalance is still decreasing as lower global commodity prices help India import less, according to CRISIL.