2023-10-13 18:47:16
A sharper decline of 15% in imports narrowed the trade deficit to a five-month low of $19.4 billion in September from the revised $21.6 billion in August.
Sequentially, the outbound shipments shrank 10% in September.
“Green shoots are confirmed by the September data. The October weekly trend data is also positive. We expect positive growth in the next six months,” said commerce secretary Sunil Barthwal.
On August export data being revised upwards by above $4 billion, officials attributed the rise of around $1.1 billion to petroleum product prices, around $660 million to engineering goods, and $452 million to electronic goods exports.
“Reconciliation of IceGate data and DGCIS takes place and sometimes some shipments get subject to more scrutiny and come with a lag,” said an official.August was the first month in the 2023-24 financial year (FY24) where exports grew. In the gems and jewellery sector, meanwhile, exports contracted 16.03% as they were hit by the Russia-Ukraine conflict, the sanctions on Russia, issues related to sourcing of diamonds and recession in developed countries, officials said. According to Barthwal, engineering goods, electronics, marine, ceramics, drugs and agriculture exports are “doing well” despite some restrictions (on food) as the country is concerned regarding its food security.During April-September (H1), merchandise exports contracted 8.77% to $211.4 billion. Imports during H1FY24 shrank 12.23% to $326.98 billion.
A Sakthivel, president of Federation of Indian Export Organisations, said sluggish growth and demand in major economies like the EU, UK and China, coupled with the subdued growth in economies like the US and Australia, has led to such a declining trend in exports once once more though the downward movement is “largely arrested”.
“There is an improvement in the production capacity because of production linked incentive schemes. The import substitution policy is working well and commodity prices are declining which is reflecting on the imports. It helps in containing inflation too,” he said.
Among markets, while exports to the US have declined, those to the Netherlands and Russia have increased, thereby countering the fall in other markets.
New markets like Turkey for office equipment and Finland, Malta and the Philippines for drug formulations have opened up.
Trade pacts
On the India-UK free trade agreement, Barthwal said he met his British counterpart in the UK last week and another meeting is likely in Delhi this week. “The negotiations are in advanced stage. We are ironing out the differences.. we are doing negotiations on a weekly basis,” he said.
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