India’s Exports Dropped By 6.58% In January.
India's exports have witnessed a sharp decline of 6.58% in January 2023 as compared to the same period last year. This has been a cause for concern for the Indian economy, which heavily relies on exports as a major contributor to its GDP. The data released by the Ministry of Commerce and Industry shows that the exports fell from $27.15 billion in January 2022 to $25.37 billion in January 2023.
India’s Exports Dropped By 6.58% In January.
India’s exports decreased by 6.58% in January compared to last year’s period. This decline is primarily attributed to lower shipments of petroleum products, gems and jewellery, and leather products. According to government data, the country’s merchandise exports stood at $26.23 billion in January, compared to $28.07 billion a year ago.
The country’s trade deficit, the difference between imports and exports, also widened to $14.54 billion in January from $11.25 billion a year ago. The drop in exports highlights the impact of the COVID-19 pandemic on global trade and the need for India to diversify its export basket.
According to the Commerce department’s initial estimates released on Wednesday, imports of goods also fell last month, albeit at a slower rate of 3.53 per cent to $50.66 billion from $52.57 billion in the same month the previous year. At $17.75 billion, the trade imbalance was practically at the same level as in January 2022.
India’s goods exports increased by 8.5% to $369.25 billion between April and January 2023, while imports rose by 21.89% to $602.2 billion. In comparison to the same 10-month period last fiscal year, the trade imbalance increased to $232.95 billion from $153.79 billion.
According to Commerce Secretary Sunil Barthwal, given that FY22 exports reached a record $422 billion, India’s export growth during the period above was excellent.
Electronics, petroleum, tobacco, chemicals, leather, marine products, and medicines were the top-grossing export categories out of the 30 major industries during the ten months.
In response to a question, Barthwal said, “If revival occurs in China, which is emerging from its Covid-19 restrictions and the efforts made by the governments in the US and the EU to boost their economies start showing results, then the growth momentum can be maintained in the remaining months of the fiscal. After the export duty was removed in January, there was an increase in iron ore exports, and this trend was anticipated to continue, he stated “.
Striving To Take Advantage
In the field of petroleum products, Barthwal continued, India had profited from the turmoil in Ukraine by purchasing more crude, refining it, and then exporting it. This is why our exports of petroleum products (this fiscal) have improved significantly, he claimed. Additionally, services exports remained robust and were expected to increase by 31.86% to $272 billion from April 2022 to January 2023.
Regarding imports, 17 of the 30 major sectors declined in January, including silver, gold, electronics, pharmaceuticals, equipment, leather, and chemicals. India’s exports of goods began to decline in July of last year due to the disruptions brought on by the Russia-Ukraine war and the recessionary trend in numerous industrialised nations.
For the first time in the current fiscal year, goods exports fell in October and decreased by 11.55 per cent to $31.6 billion. Exports increased by 9.74% to $34.89 billion in November before dropping 3.06% to $38.06 billion in December. Imports of gold, which impact the current account deficit, decreased by 70.76% to $0.70 billion in January 2023 from $2.38 billion in the same month in the last year.
From $0.64 billion in January 2022 to $0.11 billion in January 2023, silver imports fell by roughly 82 per cent. The total value of goods exported from April through January of the current fiscal year was $369.25 billion, an 8.51 per cent increase over $340.28 billion during the previous year.
According to information supplied by the Ministry of Commerce and Industry, merchandise imports from April through January 2022–23 were $602.20 billion, up from $494.06 billion during the same period in 2021–22. Up from $153.79 billion in the first ten months of the previous fiscal year, the trade deficit for the current year stands at $232.95 billion as of January 10, 2019.
While some exports, such as those of electronic goods, oil meals, oil seeds, iron ore, rice, fruits, and vegetables, experienced healthy growth, exports of gems and jewellery, engineering products, cotton, and textiles remained slow. The sector faces significant difficulty in meeting the yearly export objective due to global headwinds, according to EEPC India Chairman Arun Kumar Garodia.
Due to sluggish demand from important markets like China, the engineering exports sector has declined for almost seven months in the current fiscal year. Exports of engineering items fell by 9.8% yearly to $8.40 billion in January. Between April and January 2022–2023, engineering exports decreased by 3.37 per cent to USD 88.27 billion. In the same period, gems and jewellery shipments fell by 0.54 per cent to USD 31.61 billion.
The expected decline in global economic growth is from an estimated 3.4% in 2022 to 2.9% in 2023. According to the most recent IMF study, India’s economic growth is predicted to decline, dropping from 6.8% in 2022 to 6.1% in 2023. India’s trade is impacted in both directions by this.
According to a remark from the ministry of commerce and industry, exports are falling as the global economy slows, leading to weak export demand. Meanwhile, imports are rising as local demand holds steady due to relatively high growth. India’s exports, including goods and services, increased by 14.58% year over year in January to reach $65.15 billion.
The Services industry, which has experienced unprecedented growth of about 30%, is the crucial factor in this increase in exports. Moreover, exports of goods are growing overall at an 8.5% rate. Sunil Barthwal, the commerce secretary, has expressed optimism that the current growth trend will be maintained despite severe global challenges.
A staggering $178.45 billion was spent on crude oil imports during the first ten months of the current fiscal year, a 53.54 per cent rise from the same period last year. The value of imported coal, coke, and briquettes rose by 18.91% to $43.17 billion.
Despite the challenges faced by the Indian export sector, there are also some positive signs. The pharmaceutical industry witnessed a growth of 18.4% in January 2023 as compared to the same period last year, indicating a strong demand for Indian medicines in the international market. Additionally, the agriculture and allied products sector has witnessed a growth of 15.9%, which shows that there is still demand for Indian agricultural products in the international market.
In conclusion, the decline in exports in January 2023 is a cause for concern for the Indian economy. However, the government’s initiatives to boost exports and the positive growth in some sectors provide hope for the future. The Indian government must continue its efforts to support the exporting community and address the challenges faced by the industry to ensure sustained economic growth in the country.
Edited by Prakriti Arora