Merchandise exports fall 2.83% in November

India’s merchandise exports fell by 2.83% on an annualised basis in November to $33.90 billion, even as overall exports – goods and services combined —for the month saw a 1.23% year-on-year growth at $62.58 billion.

​India’s merchandise exports fell by 2.83% on an annualised basis in November to $33.90 billion, even as overall exports – goods and services combined —for the month saw a 1.23% year-on-year growth at $62.58 billion, which commerce secretary Sunil Barthwal termed as a “positive trend” citing projection of global trade contraction by the United Nations Conference on Trade and Development (UNCTAD).

India’s overall exports in January-November 2023 has provisionally crossed $700 billion. (Bloomberg)

Reacting to the official trade data released on Friday, the commerce secretary said green shoots are stabilising despite many external odds such as adverse geopolitical developments and tightening of interest rates in major economies, which have led to a global demand contraction. “We are much above what UNCTAD has predicted. Although the global trade is suffering we are able to hold the fort,” he said.

The UN trade body on December 11 said global trade is set to contract by 5% in 2023 (January-December) compared to 2022 with an “overall pessimistic” outlook for the coming year. India’s overall (goods and services) exports in 2023 calendar year, by comparison, is expected to be positive, a commerce ministry official said requesting anonymity.

“Although exports are function of global trade, India is expected to close the financial year (2023-24) with positive exports growth and as seen in past, most of it would come in the last quarter of FY24. The trend is visible as exports growth contraction has narrowed so is the trade deficit, which is lowest in November in the current financial year, except for April,” he said. India’s merchandise trade deficit narrowed to $20.58 billion in November according to the official data as imports also fell by 4.33% to $54.48 billion that month.

Cumulatively, India’s goods exports in the first eight months of current financial year (April 2023-November 2024) contracted by 6.51% year-on-year to $278.8 billion, but overall exports (goods and services combined) fell y-o-y by 1.39% to $499.46 billion.

Similarly, goods import also contracted by 8.67% (y-o-y) in November to $445.15 billion. Overall imports (goods and services together) In the eight-month period fell by 7.57% to $560.90 billion mainly because of a fall in energy imports in terms of value. Consequently, the trade deficit, which is the difference between imports and exports, in the first eight months of FY24 was $166.35 billion compared to $189.21 billion in the same period last year.

According to the latest data, major sectors exhibiting y-o-y merchandise exports growth in November 2023 were iron ore (2207.38%), fruits and vegetables (31.14%), meat, dairy and poultry products (19.91%), mica, coal and other ores (16.62%), gems and jewellery (11.97%), spices (11.3%), coffee (11%), drugs and pharmaceuticals (7.33%), cotton yarn, fabs, made-ups, handloom products etc (6.33%), cereal preparations (5.9%), carpet (4.22%), handicrafts (1.17%) and electronic goods (1.09%). Imports saw contraction include energy such as petroleum and coal. Oil imports in November fell by 8.47% to $14.93 billion. Gold imports, however, saw a 6.24% y-o-y jump in November to $3.44 billion.

The data estimated value of services exports in November at $28.69 billion, 6.53% up compared to $26.93 billion in the same month of 2022. The data is provisional as services data for November are extrapolation of previous month’s numbers as data for services sector are released by the RBI with a lag. For the eight-month period ending November 30, 2023, services exports came to $220.66 billion, about 6% up from $208.30 billion in the same period (April-November) of 2022.

Federation of Indian Export Organisations (FIEO) president A Sakthivel attributed the fall in goods exports to rising uncertainties, slow global economic recovery and slack demand. “The softening of the commodities prices from the elevated level in 2022 also contributed to the decline,” he said. His suggestions to boost exports included, easy and low cost of credit, marketing support, and conclusion of key free trade agreements (FTAs) with UK, Oman and EU. He expressed optimism that India will close the financial year with positive exports growth. “Exports will cross last year’s figures,” he said.