NEW DELHI: India’s merchandise exports grew 11.9% on year in February to $ 41.40 billion, the highest level in 11 months despite the headwinds from the Red Sea crisis and persistent geopolitical tensions and the stagnation in world trade. The growth in goods shipments during the month was the highest since June 2022.
This is for the third month in a row exports have grown, bucking the trend of contraction over several previous months. In the April-December period the export growth was in the positive zone for only two months.
Import of goods in February were up 12.18% to $60.11 billion, driven also by inward shipments of machinery and minerals, apart from gold and electronic goods, indicating a rise in investment demand.
“We have been able to withstand difficult times. Projections for world trade for 2024 are much better. For next year we are quite optimistic,” commerce secretary Sunil Barthwal told reporters.
The trade deficit during February was 12.9% higher than previous year at $ 18.71 billion. For April-February the deficit stood at $ 225.2 billion, down 8.4% on year.
The rebound in February was driven by engineering products which account for 24% of total exports. During the month shipments by the sector grew 15.9% to $ 9.9 billion. Electronic goods shipments were up 54.81% to $ 2.9 billion. Drugs and pharma exports were up 22%, chemicals 33% and petroleum products, 5%.
In merchandise exports, 22 of the 30 key sectors exhibited positive growth during the month.
The rise in exports in February has taken the overall exports (goods and services) for the first 11 months of the financial year in the positive zone with a growth of 0.83% over the previous year to $ 709.81 billion. If this trend is sustained in March, net exports could turn positive in Q1FY24 after several quarters, pushing up the gross domestic product.
The overall decline in goods exports stands at 3.45% which is a massive improvement from the depths of 14.12% by the end of April-June quarter. Goods exports in April-February are down to $394.99 billion while services exports are up 6.76% to $314.82 billion. It is still unlikely that goods exports this fiscal will get to last year’s level of $451 billion.
In April-February goods imports were down 5.32% to $ 620.19 billion.
This decline broadly coincides with the trends in world trade with growth of only 0.8% expected. For 2024 the World Trade Organization (WTO) has forecast the trade to expand by 3.3 %.
Imports of gold were up $133.82 billion in February to $ 6.1 billion. Officials said this is due to two vaults for gold that have been established in the country – one in GIFT city and another one in Tamil Nadu. The fluctuations in imports will continue from month to month; there is no need for an alarm, they said. Under merchandise imports, 13 out of 30 key sectors exhibited negative growth in February.
Services exports in February were up 17.3% to $ 32.15 billion and imports were up 4.8% to $15.39 billion. In April-February services exports were up 6.76% to $ 314.82 billion while imports were down 1.95% to $ 161.86 billion.
Source: The Financial Express