Thursday, 10 Oct, 2024
By: Yash Gupte
According to government data issued on Monday, India's trade deficit in April 2023 decreased to a 21-month low as exports of electronic goods, rice, medications and pharmaceuticals, oil meals, ceramic products, glassware, and spices increased significantly. Image Source: IANS
India’s overall exports (Merchandise and Services combined) in the month of April 2023 have increased by around 2 percent year-on-year from $63.75 billion in April 2022 to $65.02 billion in April 2023.
According to the latest data released by the Ministry of Commerce and Industry, India’s overall exports (Merchandise and Services combined) in the month of April 2023 have increased by around 2 percent year-on-year from $63.75 billion in April 2022 to $65.02 billion in April 2023. India’s merchandise exports in the month of April stood at $34.66 billion. The merchandise exports have dropped from $39.70 billion in April 2022 to $34.66 billion in April 2023. Talking about the service exports made by the country, it registered a positive growth as New Delhi exported more services in April 2023 as compared to the same month in 2022. Coming over to the imports, the value of overall imports in April 2023 was $66.40 billion, exhibiting a negative growth of -7.92 percent over April 2022. India had imported goods and services worth $72.11 billion in April 2022. The drop in imports was led by petroleum, crude and products, and coal & coke.
According to government data issued on Monday, India's trade deficit in April 2023 decreased to a 21-month low as exports of electronic goods, rice, medications and pharmaceuticals, oil meals, ceramic products, glassware, and spices increased significantly. The nation's overall goods and service deficit decreased to $1.38 billion over the aforementioned period from $8.37 billion during the same period last year. However, the merchandise trade deficit decreased from $18.36 billion in April 2022 to $15.24 billion in April 2023.
Source: Ministry of Commerce and Industry
The month of December registered the highest exports of goods and services. December 2022 recorded exports worth $69.32 billion, highest in the previous financial year followed by June 2022 when the exports were recorded at $69.21 billion. On the other hand, the lowest exports worth $56.97 billion were recorded in the month of October. India’s total exports in the month of March 2023 stood at $66.14 billion. Though India’s total exports increased in the month of March to $66.14 billion from $63.02 billion in February, the exports in March 2023 declined by 7.53 percent as compared to March 2022. India’s total exports in the month of March 2022 stood at $71.52 billion. Talking about April 2023, India’s total exports stood at $65.02 billion.
Overall Trade in April 2022 and April 2023 (In USD Billion)
Source: Ministry of Commerce and Industry
When it comes to merchandise exports, 11 of the 30 major industries experienced an increase in April 2023 over the same month in the previous year. Oil meals (95.14 percent), electronic items (26.49 percent), rice (24.01 percent), oil seeds (18.01 percent), ceramic items & glassware (17.21 percent), spices (14.44 percent), drugs & pharmaceuticals (10.45 percent), fruits & vegetables (9.96 percent), tobacco (6.28 percent), coffee (4.17 percent), and cereal preparations & other processed goods (2.03 percent) are a few of these. In April 2023, electronic goods exports climbed by 26.49 percent to $2.11 billion from $1.67 billion in April 2022. Exports of textiles, plastic, and linoleum kept falling in April 2023 as a result of the weak demand brought on by the recessionary consequences in several major economies.
Merchandise Trade in April 2022 and April 2023 (In USD Billion)
Source: Ministry of Commerce and Industry
Exports of goods other than petroleum, diamonds, and jewellery was $25.76 billion in April 2023 vs $28.37 billion in April 2022. However, non-petroleum, non-gems & jewellery (gold, silver & precious metals) imports in April 2023 decreased from $36 billion in April 2022 to $31.49 billion.
India's merchandise trade deficit increased to $266.78 billion in the fiscal year that ended in March 2023 from $191.05 billion the year before as import costs rose as a result of rising petroleum product prices and exports remained weak due to global headwinds. Under merchandise exports, 17 of the 30 key sectors exhibited positive growth during FY 2022-23 (April-March) as compared to FY 2021-22 (April-March). These include Oil Meals (55.13 percent), Electronic Goods (50.52 percent), Petroleum Products (40.1 percent), Tobacco (31.37 percent), Oil Seeds (20.13 percent), Rice (15.22 percent), Coffee (12.29 percent), Fruits & Vegetables (11.19 percent), Other Cereals (9.74 percent), Tea (8.85 percent) and etc.
The expected value of service exports for April 2023 is $30.36 billion, up from $24.05 billion in the corresponding month of the previous year, while the estimated value of service imports was $16.5 billion, up from $14.06 billion. The nation saw a trade surplus of $13.8 billion in the services sector, up from a surplus of $9.99 billion in the same time last year.
Service Trade in April 2022 and April 2023 (In USD Billion)
Source: Ministry of Commerce and Industry
The country’s service trade in FY2022-23 was recorded at $322.72 billion as compared to $254.53 billion in FY2021-22. In case of import of services, in FY2022-23 services worth $177.94 were imported as compared to $147.01 billion in FY2021-22. The data clearly indicates that the trade of services is extremely beneficial for India as the India has a trade surplus in case of services unlike the merchandise. In case of merchandise, India has been experiencing a trade deficit whereas in the case of service trade, it has been recording a trade surplus of $144.78 in FY2022-23 as against $107.52 billion in FY2021-22.
According to Arun Kumar Garodia, Chairman of Engineering Export Promotion Council of India, “The impact of economic slowdown in major advanced economies has been visible in global trade. However, India has still managed to minimise the impact by taking several policy measures such as expanding the rupee trade, roll-back of export duty on specified steel products, and easing procedures.”
India’s overall exports (merchandise and services combined) rose by 13.84 per cent year-on-year to $770.18 billion in 2022-23. Overall imports rose at a sharper pace of 17.38 per cent to $892.18 billion. India’s overall trade deficit widened to $122 billion in 2022-23 as against $83.53 billion in the previous year. Considering the rising trade deficit, the Union government is considering a number of actions. India wants to reduce the amount of inexpensive, non-essential imports through quality control orders (QCOs) and to replace imports with domestic manufacturing by rewarding manufacturers through PLI programmes. By investigating its export potential in fintech, the financial services industry, transportation, accounting, and legal services, the government is attempting to enhance India's exports of services from the non-IT sector. India is aiming to establish FTAs and lower tariffs with countries that have a significant market for Indian textiles, but it is also talking with SEZs about how to use their built-up space to enhance services in rural areas.
