Geopolitical tensions and recession in the western countries dragged down India’s overall export (merchandise and services combined) growth in April 2023 to a bare 2 per cent over April 2022. Overall exports last month is estimated to be USD 65.02 billion while overall imports in April 2023 tanked at USD 66.40 billion, exhibiting a negative growth of 7.92 per cent over April 2022. The combined merchandise and services deficit fell to USD 1.38 billion compared with USD 8.37 billion in the same period last year, lowest in 21 months, Commerce Ministry data showed on Monday.
Merchandise exports in April 2023 fell to USD 34.66 billion from USD 39.70 billion in April 2022, posting a 12.7 per cent year on year decline, Imports too declined by about 14 per cent to USD 49.90 billion, as compared to USD 58.06 billion in April 2022. Among the positives, India’s trade deficit in April shrank to USD 15.24 billion from USD 18.36 billion reported last year. However, an upward revision of trade data has taken the total exports in financial year 2022-23 to USD 775.87 billion, as per the Director General of Foreign Trade Santosh Sarangi who cited the cooling down of commodity prices and reduced demand for products considered discretionary spending, like gems and jewellery to the two-way decline. The drop in imports was driven by petroleum, crude and products, followed by coal and coke. Oil imports in April fell 2.46 per cent yoy to USD 15.17 billion.
Aditi Nayar, Chief Economist at ICRA Ratings sees the year-on-year decline in merchandise trade deficit in April 2023 as primarily driven by non-oil items, with the fall in crude oil prices being partly absorbed by higher volumes. “After a seasonal shrinkage to sub-USD 5 billion in Q4 FY2023, we expect the current account deficit to print at USD 8-12 billion in the ongoing quarter,” said Nayar.
Key sectors which have shown positive growth during the month of April 2023, according to FIEO President A Sakthivel include electronic goods, ceramic products and glassware, food grains, fruits and vegetables, oil meals, oil seeds, spices, tobacco, rice and coffee. “Though the decline in imports is a good sign for the country, that has led to de-growth in our key export sectors like petroleum products, gems and jewellery, organic and inorganic chemicals etc,” points out Sakthivel. Exports of electronic goods increased by 26.49 per cent during April 2023 at USD 2.11 billion as compared to USD 1.67 billion in April 2022. Textiles, plastic and linoleum exports continued to decline in April 2023 because of subdued demand due to recessionary effects in major economies.
Exports of non-petroleum, non-gems and jewellery comprising the basket of (gold, silver and precious metals) in April 2023 were USD 25.76 billion, compared to USD 28.37 billion in April 2022. The non-petroleum, non-gems and jewellery imports in April 2023 were USD 31.49 billion, compared to USD 36.00 billion in April 2022.
However, services exports rose due to a spike in IT and business consulting work. India’s estimated services exports rose USD 30.36 billion in April, compared to USD 27.75 billion in March.
