The rate of decline in merchandise exports has turned milder. The shipmentsdeclined just 2.6% on year in September to $34.47 billion, according to official data released by the commerce ministry on Friday.
The decline in imports was even sharper at 15% to $53.84 billion, leaving a trade deficit of $19.37 billion.
Meanwhile, the ministry put out revised data for August which showed that exports had actually expanded by 3.88% in the month to $38.48 billion, while the initial report was of 6.86% decline. The revision added another $4 billion to August export numbers. The trade deficit stood at $23.36 in August.
“(In August) we were able to see some green shoots in terms of improvement in exports although the global scenario is quite bleak. This (green shoots) have been confirmed by September numbers. The gap (the rate of decline) is getting narrower and narrower,” Commerce Secretary Sunil Barthwal said.
He said for the remaining six months of the financial year there should be a positive growth in exports. “Weekly trends in October confirms this.”
Along with the exports, imports have also been on the decline since February. This decline is driven in large part by lower prices of commodities, particularly crude oil. The decline in imports has kept the Current Account Deficit (CAD) in the comfort zone.
In the first quarter the merchandise trade deficit of $57.6 billion had resulted in CAD of $ 9.2 billion or 1.1% of GDP. In the July-September quarter the deficit in trade of goods stood at a comparable $ 57.98 billion.
“The narrower-than-expected merchandise trade deficit print (in September) augurs well for the current account deficit for Q2FY24, although it is expected to enlarge vis-à-vis the Q1 levels,” Chief Economist at ICRA Aditi Nayar said.
In September if petroleum and gems and jewellery exports are taken out of the equation then the exports have grown by 1.86% to $ 24.78 billion..
In April-August India’s merchandise exports declined by 8.77 % $ 211.4 billion. Imports during the first six-month period of this fiscal fell by 12.23 per cent to $ 326.98 billion. Total trade deficit in merchandise trade is $ 115.58 billion during the period.
Services exports in September are estimated at $ 29.37 billion compared to $ 29.2 billion a year ago. Imports stood at $ 14.91 billion against $ 16.27 billion. The estimated value of services exported in April-September 2023 was $164.89 billion compared to $156 billion in April-September 2022.
The sectors that have shown improved performance in September include engineering goods (6.8%), electronics goods (27.6%), drugs and pharma (9.0%), iron ore (128%) and agriculture products.
Within electronics smartphone exports grew 86% in April-August to $5.62 billion.
Barthwal said in some of the very important sectors where the Production Linked Incentive scheme is operating to improve manufacturing and export competitiveness those sectors have done well. He also said that new markets are also opening up for newer products. Turkiye has emerged as a market for office equipment from India while drugs and formulations have seen new customers in Finland, Malta and Philippines.
The World Trade Organization (WTO) recently revised down its forecast for growth in world trade in calendar year 2023 to 0.8% from from 1.7% earlier. “Despite global challenges we have been able to do well,” the Commerce Secretary said.