Exports of goods from India declined for the fifth consecutive month in June 2023, falling a steep 22.02 per cent (year-on-year) to $32.97 billion, pulled down by key sectors such as gems & jewellery, petroleum products, engineering goods and chemicals, as demand from developed countries continued to falter.

Imports of goods fell 17.49 per cent to $53.09 billion in June 2023, narrowing the trade deficit to $20.13 billion during the month, down 8.8 per cent from $22.07 billion in June last year, per quick estimates released by the Commerce & Industry Ministry on Friday.

Items which posted a steep decline in imports during the month include petroleum products, coal & coke, chemicals and pearls, precious & semi-precious stones.

The decline in exports is due mostly to the persistent slowdown in major economies, including North America and the EU, where Indian exports are concentrated, according to Commerce Secretary Sunil Barthwal.

“The twin dilemma of a slowdown and inflationary pressure in the major economies is impacting manufacturing activities and, in turn, trade activities,” Barthwal said at a press briefing on Friday.

He, however, was optimistic about things improving as exporters indicated that the inventory pile-up in major markets was declining and fresh orders had started picking up.

“In the quarter starting July, there should be a pick-up in exports. But by how much is yet to be seen,” he said.

Exports during April-June 2023 posted a 15.13 per cent fall to $102.67 billion, while imports declined 12.67 per cent to $160.27 billion. The trade deficit during April-June 2023, at $57.60 billion, was 7.95 per cent lower than the trade deficit during April-June 2022.

“It will be too early to expect the world economy to make a strong rebound and propel Indian engineering exports, but the medium and long-term outlook remains strong,” said Arun Garodia, Chairman, EEPC India.

To help exporters stay afloat in this period of uncertainty, the exporters’ body FIEO underlined the need for easy and low-cost credit to the MSMEs,  marketing support for further promoting Brand India products and services globally, and GST exemption on freight on exports.

Also read: Big slump. May trade deficit widens to 5-month high of $22 billion

While exports in July 2023 declined across a majority of sectors, including readymade garments, marine products, leather products, yarn & fabric, and plastics and linoleum, nine of the 30 key sectors posted a growth in exports, including electronic goods, drugs & pharmaceuticals, ores and minerals, fruits & vegetables, oilseeds and coffee.

India’s top five export markets in April-June 2023 sequentially were the US, the UAE, the Netherlands, China and the UK. Its top import sources were China, Russia, the US, the UAE and Saudi Arab. Russia shot to the number two spot due to increased oil imports from the country, owing to discounts offered by Moscow following Western sanctions imposed  on it.

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