India’s goods exports dipped 3.1% in FY24 on global turmoil; trade deficit down on lower imports
Geopolitical conflicts, slowdown in global demand and fall in commodity prices took their toll on India’s foreign trade with goods exports falling 3.11 per cent in 202324 to $437.06 billion. Top export items including petroleum products, gems & jewellery, readymade garments, chemicals, leather and marine products faced the heat, per government figures.
Yet, the trade deficit during the fiscal narrowed 9.33 per cent to $240.17 billion as the drop in imports was a higher 5.41 per cent at $677.23 billion. There was a significant fall in import of petroleum products, coal and coke, pearls, precious and semiprecious stones, transport equipment and chemicals, according to quick estimates released by the Commerce Ministry on Monday.
“This year was difficult from trade point of view. Not only did the UkraineRussia conflict continue, other conflicts also came up. We faced huge issues related to Red Sea and Panama Canal… But we have beaten all odds,” Commerce Secretary Sunil Barthwal said pointing out that the overall exports of goods and services (estimates) in FY24 would be marginally higher than the previous year.
The Commerce Ministry has projected almost flat overall exports (merchandise plus services)for FY24 at $776.68 billion with services exports projected to grow 4.39 per cent to $339.62 billion. (The RBI will put out its estimates on services exports for the fiscal later.)
EXPORT SECTORS
Barthwal said that as global trade was looking up this year, going by projections of both Unctad and the WTO, India’s exports were also looking up.
Sectors that did well in 202324 despite the geopolitical tensions include electronic and engineering goods, drugs and pharmaceuticals and cotton yarn. Nonpetroleum and nongems/jewellery exports inn FY24, at $320.21 billion, was higher than the previous fiscal’s $315.64 billion.
“FY24 closed on a strong note with engineering exports rising 10.66 per cent to $11.28 billion... With more Free Trade Agreements in the pipeline, engineering exports will certainly increase in coming years,” said an EEPC India statement.
According to exporters’ body FIEO, the need of the hour is to address the West Asia situation and Red Sea crisis challenges by ensuring availability of marine insurance and rational increase in freight charges.
Acknowledging that export of certain items, like gems and jewellery, had got hit due to regional conflicts, the Commerce Secretary said the government was focussing on diversification of both markets and products.
Trade deficit during the fiscal narrowed by 9.33% to $240.17 billion, with imports decreasing by 5.41% to $677.23 billion