India’s goods exports in May 2024 increased 9.1 per cent (year-on-year) to $38.13 billion, propped by sectors such as engineering goods, petroleum products, electronics, pharmaceuticals, and textiles, as global demand showed clear signs of picking up, according to government data released on Friday.
Imports in May 2024 increased by a lower 7.7 per cent to $61.91 billion, with a rise in shipments of petroleum, transport equipment, silver, and vegetable oil, but the trade deficit widened to $23.78 billion, which was a seven-month high.
Optimistic outlook
“With inflationary pressure coming down in advanced economies, there is higher purchasing power among consumers, leading to higher demand. We foresee the growth trend will continue,” said Commerce Secretary Sunil Barthwal at a press briefing on Friday.
Also read: India’s seafood exports decline due to Red Sea crisis and overseas demand slump in FY24
Exporters are optimistic about the future, with a rise in bookings reflecting expectations of significant growth in global trade in 2024 projected by major international bodies including the WTO, the IMF, and the OECD. In 2023, there was a slowdown in world trade due to high inflation, rising interest rates, and sluggish demand.
“We further expect exports to show better growth numbers with improved demand coming in from the European Union, UK, West Asia, and the US, which has given a boost to order bookings by over 10 per cent and has come as a sign of recovery for labour-intensive sectors of exports,” said Ashwani Kumar, President, FIEO.
Good start
India’s exports declined in 2023-24 by 3.1 per cent to $437 billion, but FY25 started on a positive note, with exports posting growth both in April (about 1 per cent) and May.
Total exports in April–May 2024 posted a 5.1 per cent growth of $73.12 billion. Imports during the period increased by 8.89 per cent to $116.01 billion. The trade deficit during April-May 2024 was $42.89 billion, compared with $36.97 billion during April-May 2023.
Products that recorded a decline in exports in May 2024 included gems and jewellery, marine products, iron ore, cashew, and oil meals. There was also a significant 20 per cent drop in exports of spices in May 2024 to $361.17 million, which followed the recall of certain Indian spice products in markets such as Hong Kong and Singapore.
The top five export destinations in May 2024, in terms of export growth (year-on-year), include Malaysia (86.95 per cent), the Netherlands (43.92 per cent), the UK (33.54 per cent), the UAE (19.43 percent), and the US (13.06 per cent), per the data.
The top five import sources in May 2024 in terms of rate of increase (year-on-year) include Angola (1274.95 per cent), Iraq (58.68 per cent) the UAE (49.93 per cent), Indonesia (23.36 per cent) and Russia (18.02 per cent).