India’s goods exports grew 11.86 per cent to $41.4 billion in February 2024 (year-on-year), the highest monthly export in the current fiscal so far, powered by sectors such as engineering goods, electronics, chemicals, pharmaceuticals and petroleum products despite adverse factors like the Red Sea disruptions, slowdown of Western economies and fall in commodity prices, according to the Commerce Department.

Imports of goods in February 2024 posted a higher growth of 12.16 per cent to $60.11 billion, compared to imports in the same month last year, widening the trade deficit during the month to $18.7 billion from $ 16.57 billion in February 2023, per quick estimates released by the government.

Export optimism

“The month of February has surpassed all our expectations…It is giving me a lot of hope that when we end the financial year in March, our overall goods exports will be more than last year’s record exports. All credit goes to our exporters, trading community, businesses and manufacturing units,” Commerce Secretary Sunil Barthwal said on Friday. 

On the continued crisis in the Red Sea where the Iran-backed Houthis are attacking shipments, the Secretary said that taking the Cape of Good Hope route to Europe had increased both the time taken and the costs of sending shipments from India. Despite that, exporters had been able to honour their existing commitments showing their resilience, he added.

Exporters, however, are apprehensive about the future with the tensions in West Asia and the crisis in the Red Sea leading to “unimaginably high freight rates. “ Much will depend on the new contracts to be signed with buyers during the new fiscal as the exporters have been absorbing the burden of increased freight cost as per the old agreement,” said Ashwani Kumar, President, Fieo.

In 2022-23, India’s goods exports increased 6.89 per cent (y-o-y) to $451.07 billion.

In the April-February 2023-24 period, goods exports were at $394.99 billion, lower by 3.45 per cent, compared to exports in April-February 2022-23 at $409.11 billion. Exports in March 2024 may need to touch a new high for overall exports in fiscal 2023-24 to surpass last fiscal’s performance.

Barthwal said that going by the WTO’s projections of a 3.3 per cent growth in world trade in 2025, one would expect that 2024-25 would be a good year for Indian exports.

Trade statistics

Merchandise imports for the period April-February 2023-24 at $620.19 billion was 5.32 per cent lower than imports during the same period last fiscal. The merchandise trade deficit for April-February 2023-24, at $ 225.20 billion, was lower than the deficit of $245.94 billion during April-February 2022-23.

Exports from as many as 22 of the 30 key sectors, which also included handicrafts, coffee, tea, meat, iron ore, plastic, yarn and fabrics and ceramic products and glassware, posted an increase in February 2024. 

Imports of items such as gold, electronic goods, machine tools, iron and steel, non-ferrous metals and chemicals increased in February 2024 compared to the same month last year.

The top export destinations for India in February 2024 were the US, the UAE, Singapore, South Africa, the Netherlands, Saudi Arab, the UK, China and Bangladesh.

The top import sources in February 2024 were Switzerland, UAE, China, Indonesia, Iraq, Saudi Arabia, Singapore and South Korea.

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