In March, India’s exports experienced their biggest decline in almost three years, falling 13.9% year-over-year (YoY) to $38.38 billion as geopolitical unrest and a downturn in developed nations weighed on international demand. India’s exports fell 34.6% in May 2020 as supply chains were impacted by the Covid-induced lockdown.
However, according to data supplied by the commerce and industry ministry, merchandise exports increased 6% to $447 billion for the entire fiscal year 2022–23 (FY23). The increase was mostly brought on by the strong growth seen in the first half of FY23. In October, the effects of global headwinds such a downturn in demand from developed economies brought on by high inflation, tightening monetary policy, and a lowering of commodity prices became apparent. onwards.
India imported commodities worth $58.11 billion in March, a 7.89% decrease year over year, primarily due to fewer imports of things including fertilisers, coal, petroleum products, and electronics. According to the figures, import growth overall increased by 16.5% to $714 billion in FY23.
But in March, India’s trade imbalance grew to a three-month high of $19.73 billion. The trade gap increased from $191 billion in FY22 to $267 billion in FY23 on a cumulative basis.According to Bank of Baroda Chief Economist Madan Sabnavis, future export growth is anticipated to slow down even more because of the continued weakness of global demand. “Furthermore, the currency advantage would be less strong if the rupee tended to appreciate rather than depreciate. Imports most likely steadily increasing pressure on the deficit, which may rise in response to changes in oil prices, Sabnavis added.
The performance of the manufacturing sector and GDP growth would be hampered by a sharper decline in India’s merchandise exports during the current fiscal year, according to Aditi Nayar, chief economist and head of research and outreach at ICRA.
17 out of 30 important sectors for India’s product exports experienced declines in March. Petroleum products (-44.59%), plastics and linoleum (-16.23%), diamonds and jewellery (-21.64%), engineering goods (-0.16%), and cotton yarn (-17.86%) were among the major export commodities that fell last month. Electronic products (69.84%) and pharmaceuticals were among the industries that saw increase. as well as medications (12.45%).
According to officials from the Commerce Department, China’s proportion of India’s merchandise imports fell from 15.43 percent a year earlier to 13.79 percent in 2022–23. This was mostly caused by a $2 billion decrease in electronic products imports in 2022–2023 (April–February) compared to the same period in the previous year.
Additionally, they claimed that China’s import proportion of electronic goods had decreased from 48.1% in 2021–2022 (April–February) to 41.9% in 2022–2023 (April–February). According to Commerce Secretary Sunil Barthwal, imports of fertiliser from China decreased dramatically from 21.9 percent in 2021–22 (April–February) to 13.9 percent in 2022–23 (April–February).
According to Barthwal, the government’s goal for goods and service exports was $750 billion, but it actually hit $770 billion in FY23. The actual merchandise exports for FY23 were $770 billion, and the commerce department projected services exports at $322.72 billion for the entire year, up 26% from the prior year.
We not only met but also exceeded the target, according to Barthwal, despite general headwinds.
In its most recent trade and development report update, UNCTAD stated that there were various challenges facing global trade and that reduced economic activity will eventually lead to weaker external demand and, as a result, dampened global commerce. “As a result, it is anticipated that in 2023, the annual growth of international trade will remain close to the growth of the global economy (of 2.2%).”
