India’s exports resilient in face of unfavourable conditions, says CRISIL; will it sustain?

India’s merchandise exports strengthened in January, rising 3.1 % on-year to $36.92 billion

Many core exports softened in January: electronic goods (9.3 % v 14.4 %), engineering goods (4.2 % v 10.2 %), and drugs and pharmaceuticals (6.8 % v 9.3 %)

Exports of petroleum products reversed course, increasing 6.6 % to $8.21 billion compared with a decline of 17.6 per cent in December.

Chemical exports posted a mild positive growth (0.3 %) after remaining in the contractionary zone for 15 consecutive months.

Core (non-oil, non-gold) exports grew 2.5 % on-year in January, compared with 5.4 % in December. in December.

 India’s merchandise imports grew at a similar pace as exports, reporting an increase of 3 per cent on-year to $54.41 billion from $52.83 billion in January 2023.

Petroleum and crude products imports turned positive in January, up 4.3 % on-year. Sequentially, oil imports rose to $16.57 billion in January from $14.94 billion in December.

Gold imports surged 173.6 per cent on-year. Silver imports rocketed 323.5 %compared with a contraction of 19.1 % in December. Imports of pearl, precious and semi-precious stones picked up 6.2 % on-year.

r.

Cumulatively, in April-January this fiscal, merchandise imports contracted 6.9 %on-year to $559.55 billion.

While the near-term challenge for India’s exports from the disruption caused by the Red Sea strife has been contained so far, how it will impact prices when export contracts are renewed will bear watching.