India’s goods exports fell 15.88 per cent (year-on-year) to $32.25 billion in July 2023, posting a decline for the sixth straight month, as global headwinds continued to slow down demand hitting sectors such as gems & jewellery, petroleum products, engineering goods and chemicals, per figures shared by the Commerce Department.

The government is, however, optimistic that overall exports of goods and services in fiscal 2023-24 will be higher than last year’s and record a growth.

Imports in July 2023 declined 17 per cent to $52.92 billion narrowing the trade deficit to $20.67 billion from $25.43 billion in July 2022, according to quick estimates of trade date for July 2023 released on Monday.

“Globally, we find that the headwinds that we thought would improve, are still there. Most of the countries are reporting huge decline in exports and imports. We are also part of the global supply chain,” said Commerce Secretary Sunil Barthwal at a media briefing on Monday explaining the continued decline in goods exports.

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4-month period trade

Exports during April-July 2023 posted a 14.5 per cent fall to $ 136.22 billion, while imports declined 13.79 per cent to $213.2 billion. Trade deficit in the four month period narrowed to $76.98 billion compared with the same period last fiscal.

“Despite the slowdown in global demand and fall in commodity prices, including petroleum prices, we are hopeful our exports of goods and services (this fiscal) will be higher than last year…We are hoping global headwinds will decline and we will face better export prospects,” Barthwal said.

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Non-petroleum exports in July 2023 at $27.66 billion posted a lower decline of 8.31 per cent (compared with fall in overall exports) while non-petroleum imports during the month at $41.7 billion also recorded a smaller fall of 8.95 per cent, per the data.

“On a positive note, non oil exports remained steady, even as lower oil exports dampened the overall shipments in July 2023 relative to the previous month.Based on the available trends, we expect the current account deficit to widen to $11-13 billion in Q1 FY2024 and further to $15-17 billion in Q2 FY2024, with the monthly trade deficit likely to remain above the $20 billion mark in the next couple of months,” said Aditi Nayar, Chief Economist, ICRA Ltd.

Barthwal said this year’s exports should be looked from a point of view that in last two years India’s exports growth rate was highest which made the base high.

Sectors that have done well on the export front include electronics, which demonstrated that India was moving up the global value chain, he added.

The fall in imports in July 2023 was led by the petroleum sector where imports declined 36.65 per cent to $11.75 billion. Other items that posted a fall in imports include coal & coke, fertilisers, pearls, precious & semi-precious stones and project goods. Gold imports increased by 2.7 per cent to $13.2 billion in April-July 2023.

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