According to preliminary trade figures provided earlier this month, exports fell by 3.52% in September.
Official statistics revealed that India’s merchandise exports expanded at the weakest rate in 19 months, while imports dropped despite severe currency depreciation, lowering the trade imbalance to a three-month low in September.
Exports in key sectors such as engineering, ready-made garments, cotton yarn, plastics and linoleum fell in September compared to the same month last year as demand slowed across India’s major markets, including the United States and the European Union, amid high inflation and a recessionary outlook.
India’s merchandise exports increased by 4.82% year on year in September to an eight-month low of $35.45 billion, while imports increased by 8.66% year on year to a five-month low of $61.16 billion, narrowing the trade deficit to $25.71 billion, according to data released by the ministry of commerce and industry on Friday. The trade deficit, or the difference between exports and imports, is 14.42% larger than the previous September’s figure of $ 22.47 billion. Aside from weakening demand, issues such as India’s export restrictions on wheat, steel, iron, and petroleum products have also contributed to the slowdown in exports.
Even while imports are likely to fall in value in the future due to lower global commodity prices, experts warn that factors such as deteriorating global demand may further reduce exports. However, a substantial devaluation of the rupee in the coming months may put pressure on imports. The rupee fell to an all-time low against the US dollar earlier this week, hitting 82, and was trading at 82.24 on Friday.
The non-oil, non- gems and jewellery exports contracted by 4.58% to $24.22 bn., while non-petroleum and non jewellery imports grew by 20.64% during the month.
In the first half of the current fiscal, exports stood at $231.8 bn , up 17% over the corresponding period last year.
The World Trade Organization last week estimated global trade growth to slow to 1% in 2023 from 3.5% in 2022 amid elevated global uncertainties.
The Union government expects India’s merchandise exports to touch $470bn in 2022-23, up from $422bn in the previous fiscal.
