India’s import size shrinks in Feb; services exports continue to shine

India’s merchandise exports fell by 8.8% YoY basis in February 2023, taking overall export value to US$ 405.94 billion during April-February. Despite the subdued global economic scenario, India’s services trade surplus surged by 38.6% YoY to reach US$ 132.95 billion during April-February, 2022-23.

Source: Shutterstock

A downturn in global demand caused India’s exports to decline by around 8.8% YoY, even as the merchandise trade deficit shrank to its lowest level in 13 months. India’s total exports (goods and services) are expected to have increased by 7.81% YoY in February 2023 to reach US$ 63.02 billion. Total imports, on the other hand, were estimated at US$ 65.85 billion during the month, a decrease of 4.38% YoY.

Source: Department of Commerce

In February 2023, non-petroleum and non-gems and jewelry exports were estimated at US$ 25.36 billion, a decline of 6.3% YoY. Imports of non-petroleum, non-gems, and non-jewelry (gold, silver, and precious metals) in February 2023 were US$ 31.05 billion, up by 1.9% YoY.

Source: Department of Commerce

The value of merchandise exports from April-February 2022-23 was US$ 405.94 billion, up by 7.5% YoY. India’s merchandise imports during the same period were at US$ 653.47 billion, up by 18.8% YoY. This brought the total merchandise trade deficit to US$ 247.52 billion during April-February 2022-23.

The expected value of services exports during April-February 2022-23 was US$ 296.94 billion, up by 30.5% YoY, while imports were at US$ 164.00 billion (up by 24.5% YoY). Services trade surplus surged by 38.6% YoY to reach US$ 132.95 billion during the period.

India’s total exports are estimated to increase by 16.18% YoY in Apr-Feb 2022-23. The country’s domestic demand has remained consistent despite the global downturn, due to which overall imports are expected to have increased by 19.93% over the same period last year.

Sectoral trends

In comparison to the same period in FY22, 17 of the 30 important sectors under merchandise exports saw growth during April-February, 2022-23. Petroleum items saw a 49.5% growth throughout this period, while electronic goods increased by 49.54%. This year, shipments of mobile phones are predicted to reach US$ 10 billion.

Chemicals, pharmaceuticals, rice, and ready-made clothing were among the other industries that saw growth in exports. Contrarily, engineering goods, gems, jewelry, cotton yarn, fabric made-ups, plastic, and linoleum were among the export sectors that witnessed negative growth.

Between April and February of the current fiscal year, gold imports decreased by 29.7% YoY to US$31.72 billion. Crude oil imports increased to US$ 193.47 billion in the first 11 months of the current fiscal year, growing by 37.54% YoY. Major commodities that saw a sharp increase in imports were raw and waste cotton (178%); Coal, Coke & Briquettes, etc. (70.67%); silver (65.79%); newsprint (49.7%) and pulp & waste paper (33.9%).