Sluggish global growth and demand especially in major economies like EU, UK and China found a resonance in India’s merchandise exports in August 2023 which contracted 6.86 per cent to an estimated USD 34.48 billion, as compared to USD 37.02 billion in August 2022. Merchandise imports in August 2023 were USD 58.64 billion, as compared to USD 61.88 billion in august 2022 as consignments of silver fell as as sharply as by 78.15 per cent , cotton raw and waste by 74.67 per cent, fertilisers, crude and manufactured by 55.69 per cent ), coal, coke and briquettes, etc. by 43.47per cent and petroleum, crude and products by 23.76 per cent, according to government data on Friday.
This, coupled with the subdued growth in economies like US and Australia has led to such a modest performance in exports, according to A Sakthivel, President, Federation of Indian Export Organisations (FIEO). “Moderation in pace of growth in merchandise exports significantly in 2023 has been mainly because of ongoing geopolitical tensions, disruption in global supply chain due to Russia-Ukraine war, monetary tightening and recessionary fears, which has continuously led to a fall in consumer spendings across the globe especially in advanced economies,” said FIEO President.
Merchandise exports for the period April-August 2023 were USD 172.95 billion as against USD 196.33 billion during April-August 2022. Imports for the period April-August 2023 were USD 271.83 billion as against USD 309.19 billion during April-August 2022. Thus merchandise trade deficit is expected to improve from USD 112.85 billion during April-August 2022 to USD 98.88 billion in April-August 2023
India’s overall exports (combining merchandise and services) in August 2023 shrunk 4.17 per cent over August 2022, exhibiting a negative growth of USD 60.87 billion while overall imports in August 2023 is estimated to be USD 72.50 billion, exhibiting a negative growth of 5.97 per cent over August 2022. India’s trade deficit has shown considerable decline in April-August 2023 as well, at USD 37.49 billion as compared to the deficit of USD 60.31 billion during April-August 2022, a fall of whopping 37.85 per cent.
In services, services exports for August 2023 stood at USD 26.39 billion, as compared to USD 26.50 billion in August 2022. The estimated value of services import for August 2023 is USD 13.86 billion as compared to USD 15.22 billion in August 2022.
In April-August 2023, overall imports in April-August 2023 are estimated to exhibit a negative growth of 10.35 per cent over April-August 2022, which will help overall trade deficit to improve by a projected 37.85 per cent during April-August 2023.
Sectorally, exports of non-petroleum and non-gems and jewellery, which comprises outbound shipments of gold, silver and precious metal, in August 2023, grew marginally to USD 26.00 billion, compared to USD 25.20 billion in August 2022. Non-petroleum, non-gems and jewellery imports in August 2023 were USD 38.31 billion, compared to USD 37.86 billion in August 2022.
For engineering exports, the August trade data has brought welcome relief for the sector. “After eight consecutive months of year-on-year decline, engineering goods exports have turned positive with total shipments value registering 7.73 per cent growth last month,” said Arun Kumar Garodia, Chairman, EEPC. Engineering goods exports moved from USD 8.41 billion in August 2022 to USD 9.05 billion in August 2023.
As per the data from the Ministry of Commerce and Industry, engineering goods exports stood at USD 9.05 billion in August 2023 as against USD 8.40 billion in August 2022. The industry has been affected by various factors such as a slowdown in key advanced markets and muted overall demand led to a decline in engineering goods exports in previous months, points out Garodia. A decline in exports of iron & steel and aluminium significantly contributed to this negative trend. Electronic goods exports showed growth of 26.29 per cent and 35.22 per cent in August 2023 and April-August 2023 and exports of ceramic products and glassware grew by 29.28 per cent in August 2023 and 15.74 per cent in April-August 2023. Drugs and pharma exports continue to grow at 4.53 per cent in August 2023.
Agricultural exports registered robust growth in August 2023 led by export growth of oil meals by 57.26 per cent, tobacco by 20.03 per cent, oil seeds by 17.02 per cent, meat, dairy and poultry products by 16.46 per cent), cashew by 14.25 per cent, fruits and vegetables by 14.19 per cent, cereal preparations and miscellaneous processed items by 12.88 per cent.
The FIEO chief is of the view that exports will start showing better growth numbers, as things are expected to improve in the next few months with more fresh orders coming and order bookings for the Christmas and New Year season. Exporters, however, are hoping for a further momentum to the economy through easy and low cost of credit to the MSMEs, long-pending demand for marketing support for promoting Brand India products and services globally and GST exemption on freight on exports.