EXPORTS AND IMPORTS FROM INDIA - ECONOMY

EXPORTS AND IMPORTS FROM INDIA - ECONOMY

News: Goods exports grew 6%, imports 16.5% this fiscal

What's in the news?

●       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.

Key takeaways:

●       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. 

●       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.

1. Increased exports:

●       Despite the global headwinds, India has 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.

●       Services exports have grown 13.84% to an estimated $322.72 billion.

a. Lead from oil and electronics:

●       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.

○       Petroleum exports now account for 21.1% of total exports, up from 16% in 2021-22.

●       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%).

b. Shrinking of engineering exports:

●       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%.

c. Fall in non-oil goods exports:

●       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.

d. Appreciating rupees:

●       With the Rupee seeing an appreciating tendency, the currency advantage would be weaker for exporters.

2. Increase in imports:

a. Surge of Russian imports:

●       Fuelled by discounted oil shipments, India’s imports from Russia grew almost 370% to over $46 billion in 2022-23.

●       Russia’s share in imports 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.

b. Reduced China's share:

●       China’s share of goods imports dipped to 13.8% in the year from 15.4% in 2021-22.

●       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.

c. Increased imports of coal and oil:

●       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.

Go back to basics: