NEW DELHI: India’s goods exports slipped back into contraction in November, recording a fall of 2.83% to $33.9 billion, but a sharp drop in imports narrowed the trade deficit to a three-month low of $20.58 billion, official data showed. Trade deficit had touched an all-time high of $31.5 billion in October on the back of rise in gold, petroleum and electronic goods.
In October, goods exports were $33.54 billion and the growth of outbound shipments was 6.2% on-year. India had clocked $34.89 billion of goods exports in November 2022. Exports rose 0.98% month-on-month in November. Imports shrank 4.3% on-year in November to $54.48 billion.
Commerce Secretary Sunil Barthwal said that the country has done “extremely well” despite interest rates not softening, global trade slowing down and global conflict aggravating. “GDP growth is not high in many countries and interest rates have not gone down. Although global trade is suffering, we are holding fort and our exports have beaten the global trends in 2023 by a significant margin,” he said, adding that the green shoots visible in the last couple of months have stabilised. Fifteen of the 30 key export sectors grew in November, led by gems and jewellery, pharmaceuticals, fruit and vegetables, and mica, coal and ores. In April-November FY24, merchandise exports contracted 6.51% to $278.8 billion while imports fell 8.67% to $445.15 billion. Oil imports shrank 8.47% on-year in November while gold imports rose 6.24%. “India’s merchandise trade deficit unexpectedly shrunk in November, and a better-than-expected performance of exports resulted in a narrower deficit of $20 billion as compared to our projection of $23.5 billion,” said Aditi Nayar, Chief Economist, ICRA.
Currency crisis and domestic issues Bangladesh and Sri Lanka have impacted their imports from India. “Bangladesh has a major import squeeze. Cotton yarn and edible commodities have been hit but we are not pressuring them to import more,” said an official. Engineering goods exports contracted 3% year-on-year in November to $7.85 billion. “The decline in engineering exports last month was entirely due to the festival season in large parts of major engineering export belts in Northern and Western India as also in the rest of the regions of the country,” said EEPC chairman Arun Kumar Garodia.
Officials said that the government aims to amend the Special Economic Zones (SEZ) Act and introduce the amendment in the upcoming budget session of Parliament. The amendment will allow companies in SEZs to sell in domestic tariff area. It will also ratify the supply chain resilience agreement of the Indo-Pacific Economic Framework (IPEF) which seeks to reduce dependence on China, and shift production of critical sectors and key goods to member countries.
Source: The Economic Times
