Goods exports grew 6% , imports 16.5% this fiscal

India’s goods exports declined for the second successive month in March, falling a sharp 13.9% to $38.38 billion while imports dipped 7.9% to $58.11 billion. Total goods exports in 2022-23 rose 6.03% to $447.46 billion, while the import bill surged by a steeper 16.5% to $714 billion.

The goods trade deficit rose almost 40% to over $266 billion in 2022-23, compared to $190 billion in 2021-22. However, using estimates for Services exports during March for which final data will be available in May, the Commerce and Industry Ministry pegged the total trade deficit for the year at $122 billion, 46% higher than the $83.5 billion gap in 2021-22.

“Despite the global headwinds, we have surpassed our 2022-23 target of $750 billion dollars to hit $770.18 billion, which is $94 billion higher than last year’s record exports,” Commerce Secretary Sunil Barthwal said, using services exports estimates combined with the actual numbers for goods exports. “Services exports have grown 13.84% to an estimated $322.72 billion,” he added.

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Oil, electronics lead

India’s uptick in outbound shipments was largely led by petroleum, up 27% to $94.5 billion, followed by electronics goods that rose 7.9% to $23.6 billion. The other three of India’s top five export items registered insignificant growth – Rice (up 1.5%), chemicals (1%), and drugs and pharmaceuticals (0.8%). Petroleum exports now account for 21.1% of total exports, up from 16% in 2021-22.

Engineering goods, India’s mainstay in goods exports in recent years, shrank 5.1% to $107 billion, bringing down their share in total exports from $26.6% to 23.9%. Non-oil exports, in fact, contracted 0.5%, and if electronics exports were excluded too, goods shipments were 2.8% lower than 2021-22, which economists called a red flag.

‘Further slowdown likely’

“Slackening external demand amid the global slowdown in the second half last year, along with the moderation in global commodity prices hurt non-oil exports and these concerns are set to exacerbate this year,”said Aditi Nayar, chief economist at ICRA. Ms. Nayar said this could lead to a deeper contraction in merchandise exports in 2023-24, affecting manufacturing output and dragging down GDP growth.

“Important segments like engineering and gems and jewellery witnessed negative growth and we may expect further slowdown in exports,” said Madan Sabnavis, Bank of Baroda chief economist.

Moreover, with the Rupee seeing an appreciating tendency, the currency advantage would be weaker for exporters. Imports may slow a little due as domestic growth slows down, but could keep putting pressure on the deficit that could increase if oil prices harden, he cautioned.

Russian imports surge

Fuelled by discounted oil shipments, India’s imports from Russia grew almost 370% to over $46 billion in 2022-23. Russia’s share in import leaped from 1.6% in 2021-22 to 6.5% last year, making it the fourth largest import source nation for India, behind China, UAE and the USA.

China’s share of goods imports dipped to 13.8% in the year gone by from 15.4% in 2021-22, officials said. However, imports from the country still grew 4.2% to reach $98.5 billion last year, while exports to China fell 28% to just $15.3 billion. Indian shipments to China now account for just 3.4% of total exports, from over 5% in 2021-22.

Coal, oil imports up

While petroleum imports jumped about 30% to nearly $210 billion in 2022-23, coal imports grew at a faster 57% to touch almost $50 billion. Gold imports, on the other hand, fell around 24% to $35 billion as global prices for the metal surged and the Rupee turned weaker.

The USA remained India’s top export destination, followed by UAE, while Netherlands emerged as the third largest goods buyer, displacing China to the fourth position in 2022-23. Netherlands’ share of Indian exports jumped from under 3% in 2021-22 to 4.7%, recording a staggering 66.6% uptick year-on-year. Bangladesh and Hong Kong remained in India’s top 10 export markets, although the value of shipments to their shores contracted 27.8% and 9.9%, respectively.

With the government setting a two trillion-dollar target for goods and services exports by 2030 under the new Foreign Trade policy, the apex exporters’ body FIEO sought marketing support to sell their wares around the world and an exemption from the Goods and Services Tax levied on freight for goods shipments.