Wednesday, 09 Oct, 2024
By: Yash Gupte
The value of overall imports in May 2023 was $70.64 billion, exhibiting a negative growth of -7.45 percent over May 2022. India had imported goods and services worth $76.32 billion in May 2022. Image Source: IANS
India’s merchandise exports in the month of May 2023 stood at $34.98 billion. The merchandise exports have dropped from $39.00 billion in May 2022 to $34.98 billion in May 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 May 2023 decreased by around 6 percent year-on-year from $64.13 billion in May 2022 to $60.29 billion in May 2023. India’s merchandise exports in the month of May 2023 stood at $34.98 billion. The merchandise exports have dropped from $39.00 billion in May 2022 to $34.98 billion in May 2023. Talking about the service exports made by the country, it registered a slight positive growth as New Delhi exported more services in May 2023 as compared to the same month in 2022. Coming over to the imports, the value of overall imports in May 2023 was $70.64 billion, exhibiting a negative growth of -7.45 percent over May 2022. India had imported goods and services worth $76.32 billion in May 2022.
Talking about New Delhi’s merchandise trade deficit, it jumped to five-month high of $22.12 billion in May 2023. Merchandise exports fell about 10.3 percent to $34.98 billion from a year ago in May, while merchandise imports declined 6.6 percent annually to $57.10 billion.
India’s overall exports (Merchandise and Services combined) in April-May 2023 are estimated to be $120.87 Billion, exhibiting a negative growth of -5.48 per cent over April-May 2022. Overall imports in April-May 2023 are estimated to be $134.15 Billion, exhibiting a negative growth of -9.63 per cent over April-May 2022.
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. In May 2023, India’s overall exports (Merchandise and Services combined) decreased by around 6 percent year-on-year from $64.13 billion in May 2022 to $60.29 billion
Overall Trade in May 2022 and May 2023 (In USD Billion)
Source: Ministry of Commerce and Industry
India’s trade performance, after witnessing very strong growth in 2022-23 has shown declining trends as compared to high base of last year as the pace of growth in global merchandise exports moderated significantly in 2023, as persisting geopolitical tensions and monetary tightening induced recessionary fears have led to a decline in consumer spending across advanced nations. The overall trade deficit for April-May 2023 estimated at $13.28 Billion as compared to the deficit of $20.56 Billion during April-May 2022, registering a decline of -35.41 percent.
Merchandise Trade in May 2022 and May 2023 (In USD Billion)
Source: Ministry of Commerce and Industry
Merchandise exports in May 2023 were $34.98 Billion, as compared to $39.00 Billion in May 2022 whereas the Merchandise imports in May 2023 were $57.10 Billion, as compared to $61.13 Billion in May 2022. Talking about the April-May 2023 period, the merchandise exports were $69.72 billion as against $78.70 during April-May 2022. Merchandise imports for the period April-May 2023 were $106.99 Billion as against $119.18 Billion during April-May 2022. The merchandise trade deficit for April-May 2023 was estimated at $37.26 Billion as against $40.48 Billion during April-May 2022.
When it comes to merchandise exports, 13 of the 30 major industries experienced an increase in May 2023 over the same month in the previous year. These include Electronic Goods (73.96 percent), Other Cereals (67.96 percent), Oil Meals (52.91 percent), Spices (49.84 percent), Iron Ore (48.26 percent), Oil Seeds (25.02 percent), Fruits & Vegetables (19.91 percent), Ceramic Products & Glassware (17.36 percent), Rice (14.27 percent), Tea (8.81 percent), Cashew (2.81 percent), Coffee (1.71 percent) and Drugs & Pharmaceuticals (0.78 percent).
Exports of Electronic goods increased by 73.96 percent during May 2023 at $2.42 Billion as compared to $1.39 Billion in May 2022. During April-May 2023 electronic goods exports were recorded at $4.54 Billion as compared to $3.06 Billion during April-May 2022, registering a growth of 48.06 percent. Enabling policies facilitating greater investment in electronics, mobile manufacturing, pharmaceuticals, etc. has resulted in visible growth in these sectors. Effect of duty withdrawal on Iron Ore is visible on India’s exports of the item which have exhibited positive growth of 48.26 percent during May 2023 over the same month in 2022.
Service Trade in May 2022 and May 2023 (In USD Billion)
Source: Ministry of Commerce and Industry
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.
Non-petroleum and non-gems & jewellery exports in May 2023 were $26.22 Billion, compared to $27.30 Billion in May 2022. Imports of non-petroleum, non-gems & jewellery (gold, silver & precious metals) in May 2023 were $35.88 Billion, compared to $35.29 Billion in May 2022.
The estimated value of services export for May 2023 is $25.30 Billion, as compared to $25.13 Billion in May 2022 whereas the estimated value of services import for May 2023 is $13.53 Billion as compared to $15.20 Billion in May 2022.
The estimated value of services export for April-May 2023 is $51.14 Billion as compared to $49.17 Billion in April-May 2022. The estimated value of services imports for April-May 2023 is $27.16 Billion as compared to $29.25 Billion in April-May 2022. The services trade surplus for April-May 2023 is estimated at $23.98 Billion as against $19.92 Billion in April-May 2022.
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.
Aditi Nayar, Chief Economist and Head Research and Outreach, ICRA Ltd said, “While lower commodity prices led to a 6.6 per cent YoY contraction in merchandise imports in May 2023, some key items such as iron and steel, machine tools, machinery, electronic goods, fertilisers and pharma witnessed a YoY expansion, which led to a sequential rise in overall imports. The month of May typically tends to see higher imports of several items such as fertiliser, gold, fuels, etc vis-a-vis April. The available trade data for April-May 2023 suggests that the CAD is likely to widen to $10-12 billion in Q1 FY2024 from $2 billion expected in Q4 FY2023, while remaining manageable at ~1.2 per cent of GDP.”
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.
