India’s merchandise exports witnessed a decline of 3.1% in the fiscal year 2023-24, echoing a global trend of subdued trade activity, as per data released by official sources.
The contraction in exports, coupled with a 5.3% reduction in imports, reflects a challenging year for India’s trade dynamics, despite a resurgence in shipments during the latter months of the fiscal. The subdued performance in merchandise trade follows two consecutive years of positive growth, attributed to the base effect stemming from the pandemic-induced economic downturn in FY20-FY21. Correspondingly, India’s foreign trade performance mirrors the global scenario, as highlighted by the World Trade Organization (WTO), which reported a 1.2% contraction in global demand for traded goods in 2023. While the WTO has revised its projection for merchandise trade volume growth downward for 2024, India’s prospects remain intertwined with the broader global trade landscape. The Global Trade Research Initiative (GTRI) forecasts a marginal decline in world merchandise trade values for 2024, emphasising the need for strategic adjustments to navigate evolving trade dynamics.
India’s merchandise exports in FY24 amounted to $437.06 billion, a decrease from the previous fiscal’s figure of $450.6 billion, while imports stood at $677.4 billion, down from $715.3 billion. However, the services sector showcased resilience, with earnings from overseas markets registering a 4.39% growth to reach $339.62 billion. Despite the decline in merchandise trade, India’s overall exports remained relatively flat at $776.68 billion in FY24, reflecting a marginal increase of 0.04% year-on-year. Moreover, the merchandise trade deficit narrowed by 9.33% to $240.17 billion, contributing to an overall reduction in trade deficit by 35.77% to $78.12 billion.
March witnessed a notable uptick in exports, reaching $41.68 billion, albeit marginally lower than the previous year. Conversely, imports in March declined by 5.98% to $57.28 billion, underscoring fluctuations in trade dynamics amidst changing global conditions. While challenges persist, India’s export performance in key sectors such as engineering goods, electronics, and pharmaceuticals presents areas of strength amidst broader uncertainties. However, sectors including petroleum, coal, and gems and jewellery exhibited negative growth in merchandise imports, highlighting areas for strategic intervention and policy focus. As India navigates the evolving global trade landscape, proactive measures to enhance export competitiveness, diversify trade portfolios, and address sector-specific challenges will be imperative to sustain growth momentum and leverage emerging opportunities in the international market.
