A day after the official data showed only a slight increase in merchandise exports in November from a year before, the commerce ministry on Friday asserted that exports have shown “resilience” in the face of strong external headwinds.
India still remains a “bright spot” and the marginal growth in exports in November came even on an unfavourable base, as FY22 was an “exceptional” year, L Satya Srinivas, additional secretary in the commerce ministry, told reporters.
Exports had hit a record $422 billion in FY22, way above the previous high of $330 billion, on the back of an industrial resurgence in advanced economies. However, thanks to the Ukraine war and the interest rate tightening by key central banks to control inflation, advanced markets–including the EU–are facing a sharp slowdown in growth now.
Another commerce ministry official ruled out any meaningful impact of the western price cap on Russian oil on India. Earlier this month, the western powers imposed a price cap of $60 per barrel on Russian crude oil transported by ships, lower than its then market price of $67, to impair Moscow’s ability to finance the Ukraine war. Russia has emerged as India’s second-largest crude oil supplier this year.
India’s merchandise exports grew just 0.6% to $32 billion in November from a year before. They had shrunk 16.7% in October, the first drop in 20 months and the worst since May 2020. However, goods exports in the first eight months of FY23 touched $295.3 billion, up 11.1% from a year earlier, mainly due to robust growth earlier this fiscal.
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.
Meanwhile, services exports continue to rise at a decent pace. Between April and November, such exports jumped almost 29% to $204.4 billion. Of course, the November data are based on preliminary assessment.
The World Trade Organization (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 far more subdued in 2023 than this year.
DPIIT focussing on 24 sectors to push exports
The Department for Promotion of Industry and Internal Trade (DPIIT) on Friday said it’s focussing on 24 champion sectors, including electronics, auto parts and textiles, to prop up domestic manufacturing and raise exports. It’s keeping in mind Indian industry’s strengths and competitive edge, “need for import substitution, potential for export and increased employability”.
Some of these sectors are steel, EV components, furniture, air-conditioners, footwear, aluminium, agrochemicals, integrated circuits, ethanol, ceramics, set top boxes, robotics, televisions, close circuit cameras, toys, drones, sporting goods and gym equipment.