Exports dive 12% in Dec on global demand slump

The country’s overall merchandise exports remained in positive territory during the first nine months of 2022-23, with 9.1% year-on-year growth to $332.76 billion, although demand from markets such as China and Bangladesh fell sharply.

New Delhi: 

India’s goods exports in December declined by 12.2% to $34.48 billion on an annualised basis and imports fell by 3.46% to $58.24 billion, mainly due to global headwinds. (AP)

India’s goods exports in December declined by 12.2% to $34.48 billion on an annualised basis and imports fell by 3.46% to $58.24 billion, mainly due to global headwinds. The country’s overall merchandise exports remained in positive territory during the first nine months of 2022-23, with 9.1% year-on-year growth to $332.76 billion, although demand from markets such as China and Bangladesh fell sharply.

The estimated value of services export for December was $27.34 billion, up by 5.23% compared to $25.98 billion in the year-ago period. Services import rose by 4.14% to $15.56 billion against $14.94 billion in December 2021, according to provisional trade data released by the commerce ministry on Monday. The data for services trade is an estimation that will be revised on the Reserve Bank of India’s release of December data.

Merchandise trade deficit in December rose to $23.76 billion, compared to $21.06 billion in the same month of 2021, official data show. The trade deficit for April-December jumped to $218.94 billion compared to $136.45 billion in the same period a year ago.

India’s overall exports in the nine months to December jumped 16.11% year-on-year at $568.57 billion as domestic demand remained steady amid the global slump, the ministry said in a statement. Overall imports in April-December grew by 25.55% to $686.7 billion over the same period last year.

India is moving to new markets as demands in some of the traditional markets are shrinking because their economies slowed due to various reasons ranging from pandemic, currency issues and other geopolitical reasons, he said. India was able to perform better because of its robust domestic demand and nimble trade strategy, he added.

According to the provisional data, China and Bangladesh – India’s two key markets in April-December -- saw 35.58% and 20.39% year-on-year decline in merchandise exports, respectively. However, exports to the Netherlands surged by about 69% and to Brazil by about 64%, signifying that New Delhi is tapping new markets.

India is assessing opportunities focusing on countries and commodities and taking steps necessary in the national interest, the secretary said. Imports from Russia surged around 400% to $32.88 billion in April-December as India is importing cheaper crude oil from the country, which helped in containing import bills.

Besides domestic consumption of energy, value-added refined petroleum products are exported to various destinations, including the Netherlands, in large quantities. While petroleum crude is India’s top import ($163.91 billion in April-December), refined petroleum also tops the exports list ($70.28 billion).

While exports of value-added products such as electronic goods and mobiles have gone up, imports of raw material and intermediates have increased as well, the commerce secretary said, underscoring benefits of policies such as Aatmnirbhar Bharat Abhiyaan and production-linked incentive (PLI) schemes. Exports of electronic goods jumped 51.56% to $16.67 billion in April-December.

“Given the cumulative growth until December 2022 and the indicators of the slowdown in global economic activity, there is cautious optimism on international trade in the last quarter of the current financial year,” the commerce ministry said in a statement.

The coming months would be “quite challenging unless both global economic growth and geopolitical situation improves drastically”, according to A Sakthivel, president of the Federation of Indian Export Organisations, an industry grouping.

Merchandise exports in negative territory “is on expected lines” as the challenges continue due to recession like situation, slowdown and rising inflation in most economies across the globe, Sakthivel said.

“Decline in merchandise exports is a reflection of the toughening global trade conditions on account of high inventories, economies entering recession, high volatility in currencies and geopolitical tensions,” he said.

The drop in commodity prices and restriction on some exports, with a view to stem the price increase in the domestic market, have also affected the growth numbers, he added.

“However, decrease in imports is a good sign, which will put less burden on trade deficit front. We hope that the energy prices will come down further to provide more relief,” Sakthivel said.