Merchandise exports barely inched up in November from a year before to $32 billion but they reversed a steep contraction witnessed in the previous month in the wake of a demand slowdown in key markets.
In a late-night release on Thursday, the commerce ministry said imports grew 5.4% on year in November to $55.9 billion, leading to a trade deficit of $23.9 billion, lower than the October level of $26.9 billion. Exports in November last year stood at $31.8 billion.
With this, goods exports in the first eight months of FY23 touched $295.3 billion, up 11.1% from a year earlier, while imports grew 29.5% to $493.6 billion, mainly due to robust growth earlier this fiscal.
Exports had shrunk 16.7% in October, the first drop in 20 months and the worst since May 2020.
Exports dropped in 15 of the 30 key segments, against 24 in the previous month. However, some segments have performed relatively well. These include electronics (growth of 54.5%), rice (19.2%), garments (11.7%), drugs and pharmaceuticals (8.7%) and gems and jewellery (4.6%).
The easing growth in imports suggests domestic consumption of goods may be slowing after the revenge purchases earlier this fiscal.
Commerce secretary Sunil Barthwal had last month said that strong external headwinds were impacting consumption worldwide, which would have an impact on India’s exports as well. The aggressive interest rate hikes by the US and Europe to tame runaway inflation there is also weighing down demand for merchandise globally, he suggested.
The restrictions on exports of non-basmati rice and the ban on those of wheat to ease domestic inflation have also contributed to the export decline. Even export curbs on select steel products and iron ore were listed only late last month.
The World Trade Organisation (WTO) recently warned of a darkened 2023 and projected that global trade growth will drop to only 1% next year from 3.5% in 2022. This means export prospects for countries, including India, could remain subdued next year as well, according to analysts.
Core exports (excluding petroleum and gems & jewellery segments) inched up marginally to $24.1 billion in November from $23.9 billion a year before. Such imports rose to $34.45 billion from $32.33 billion.