NEW DELHI: India’s merchandise exports contracted 3.1% on year in 2023-24 and imports 5.3%, even though the later months of the year saw a pick-up in the two-way shipments. The contraction in goods trade with other countries came after two successive years of positive growth on the low base created by the pandemic-induced slump in FY20-FY21.
This meant India’s foreign performance in the last year was in line with the global trend – as per the World Trade Organization (WTO), global demand for traded goods shrank 1.2% in 2023.
Last week, the WTO revised its projection for merchandise trade volume growth in 2024 to 2.6% from 3.3% seen earlier. However, Delhi-based Global Trade Research Initiative’s (GTRI) forecasts a 1.2% drop in world merchandise trade values in 2024, over 2023.
According to official data released on Monday, merchandise exports in FY24 were $437.06 billion. This compares with $450.6 billion worth exports in the previous year. Import of goods in FY24 stood at $677.4 billion down from $715.3 billion in the previous year.
Services sector earnings from overseas markets grew 4.39% on year to $ 339.62 billion in FY24. Including this India’s overall exports were $776.68 billion in FY24, a flat growth of 0.04% on year.
“It was an extremely difficult year from the point of view of world trade. The Russia-Ukraine conflict continued. There was a huge issue with respect to the Red Sea. Then there were recessionary trends,” commerce secretary Sunil Barthwal said.
Merchandise trade deficit in FY24 was down 9.33% on year to $ 240.17 billion. Overall trade deficit was down 35.77% to $ 78.12 billion.
March saw largest monthly exports in FY 24 at $41.68 billion though they were 0.67% lower than last year. Imports in March were down 5.98% to $ 57.28 billion. Services exports contracted 6.25% in March to $ 28.14 billion and imports were down 6.57% to $15.84 billion.
With World Trade Organisation (WTO) and United Nations Conference on Trade and Development (UNCTAD) also forecasting world merchandise exports growing in 2024 after 5% contraction in 2023, India’s performance in recent months gives hope.
“In merchandise exports we have moved into a positive cycle of growth from this (calendar) year onwards. Globally things are looking up and we are also looking up,” Barthwal said.
In January-March this year, merchandise exports were up 4% to $208.3 billion. “In March the exports were highest during the year. Merchandise exports in dollar terms are increasing every month,” the secretary said.
Under merchandise exports 17 of the 30 key sectors exhibited positive growth during FY 24 while under merchandise imports, 16 of the 30 key sectors exhibited negative growth.
Engineering goods that account for 24% of the total exports grew 10.66% to $109.3 billion in FY 24. Electronic product exports were up 23.64% to $ 29.1 billion while exports of drugs and pharmaceuticals were up 9.67% to $ 27.8 billion.
Under merchandise imports, 16 of the 30 key sectors exhibited negative growth in FY 2023-24. Maximum decline was seen in petroleum crude, coal, gems and jewellery, fertilizers and chemicals.
Source: The Financial Express