Merchandise exports up 1% to $34.99 bn in April

The country’s merchandise exports rose by 1% to $34.99 billion in April 2024 as compared to $34.62 billion in April 2023, according to provisional

New Delhi India started the first month of current financial year with a positive year-on-year growth for merchandise and services exports to $35 billion and $29.57 billion respectively, commerce secretary Sunil Barthwal said while expecting sustained performance in coming months to post higher goods and services exports in FY25 surpassing record $778.2 billion achieved in FY24.

Experts said the positive beginning in 2024-25, particularly in merchandise export, is likely to sustain as global demand is expected to improve which is in lines with the World Trade Organisation’s (WTO) outlook. (Bloomberg)

The country’s merchandise exports rose by 1% to $34.99 billion in April 2024 as compared to $34.62 billion in April 2023, according to provisional data released by the commerce ministry that estimated services export in April this year at $29.57 billion, 14.7% higher than $25.78 billion achieved in the same period of FY24. The services trade data for the month of April 2024 is, however, is an estimation as a final figure is released by the Reserve Bank of India (RBI) with a lag. Overall exports (merchandise and services) in April 2024 saw a 6.88% y-o-y growth at $64.56 billion.

Citing revised numbers for overall exports in 2023-24 ($778.2 billion) after factoring in updated services trade data released by RBI for the month of March, Barthwal said actual numbers for FY24 turned out to be higher than the estimate of $776.68 billion initially made on April 15. Overall exports in FY24 increased marginally compared to provisional numbers released a month ago because of conservative estimation of the services export figures for March 2024, he said. “So now, this is the new highest, so to say, the new benchmark, which we have established,” he said indicating that the government will make efforts to achieve higher export growth in FY25 on a higher base. In FY23, India achieved an overall export of $776.4 billion, which was also a record then.

Experts said the positive beginning in 2024-25, particularly in merchandise export, is likely to sustain as global demand is expected to improve which is in lines with the World Trade Organisation’s (WTO) outlook. “World merchandise trade volume is expected to grow 2.6% in 2024 and 3.3% in 2025 as demand for traded goods rebounds following a contraction in 2023,” according to April 10 forecast of WTO. However, regional conflicts, geopolitical tensions and economic policy uncertainty pose substantial downside risks to the forecast, it said.

Pointing at headwinds such as high logistics costs due to the Red Sea crisis and prolonged wars in the Europe and the Gulf region, Federation of Indian Export Organisations (FIEO) president Ashwani Kumar said, “Starting the new financial year 2024-25 on a positive note… is good sign even during such challenging times.” Compared to April 2024, merchandise exports in March 2024 saw a 0.67% year-on-year decline to 41.68 billion.

Barthwal said, India’s merchandise exports have entered a “positive cycle” and faster growth is expected with low inventories are full order books. “We further hope that exports will start showing better growth numbers with improved demand in the European Union, UK, West Asia and the US, which has given boost to the order bookings by over 10% and has come as sign of recovery for labour-intensive sectors of exports,” Kumar said.

According to the latest official data, while India’s merchandise exports saw a 1% annualised growth in April, the trade deficit widened to a four-month high of $19.1 billion in the month. Sectors that boosted merchandise exports included electronics, chemicals, petroleum products and pharmaceuticals. Merchandise imports in April 2024 jumped by 10.25% to $54.09 billion, as compared to $49.06 billion in April 2023, on a significant jump in gold imports ($3.11 billion in April 2024), imports of precious metals ($3.11 billion) and crude oil imports ($16.5 billion). The trade deficit in April 2023 was $14.44 billion, which was mainly because of higher prices of commodities in the international market.

PHD Chamber of Commerce and Industry president Sanjeev Agrawal said, “We look forward to a great export growth trajectory in the current financial year.” Recently India has signed a long-term contract for the development of Shahid Beheshti Port Terminal, Chabahar, which is expected to boost regional connectivity between India, Iran, Afghanistan and Central Asia, and thereby, reducing cost of trade and enhancing exports to Central Asian countries, he said. “This port is also anticipated to act as a gateway to boost trade with European countries,” he added.