India’s exports down 2.6% YoY; trade deficit at 5-month low

India’s goods exports in September 2023 declined by 2.6% to US$ 34.47 billion, with sectors like petroleum, gems & jewellery, chemicals, and garments facing challenges.

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In September 2023, India’s goods exports experienced a 2.6% YOY decline, amounting to US$ 34.47 billion. This marked the fifth consecutive month of export contraction during this fiscal year. The decline was primarily driven by sectors such as petroleum, gems & jewellery, chemicals, and garments. However, the government remains optimistic, citing the emergence of “green shoots” in the economy, and anticipates that exports may pick up in the remaining six months.

There was a notable decrease of 15% on the import front, with imports totalling US$ 53.84 billion in September 2023. A significant drop in petroleum imports, down 20.3% to US$ 14 billion, contributed to this reduction in trade deficit, which reached a five-month low at US$ 19.37 billion, per quick estimates released by the Commerce Department.

Excluding petroleum and gems & jewellery, goods exports in September 2023 reached US$ 24.78 billion, surpassing the US$ 24.33 billion recorded in September 2022, though the increase was marginal.

In a data revision following some reconciliation with customs, exports for August 2023 were adjusted to a higher figure of US$ 38.4 billion, resulting in a 3.88% YOY growth instead of the previously reported 6.8% fall. Director General of Foreign Trade Santosh Sarangi noted, “In the current financial year, this (August 2023) is the first month where we have achieved positive growth.”

The Commerce Secretary, Sunil Barthwal, highlighted that services exports were performing well, and the decline in merchandise exports had become less pronounced, instilling optimism. He stated, “I think for the remaining six months, there should definitely be positive growth in our exports. In fact, these green shoots are getting confirmed.”

For the April-September 2023 period, exports saw a decline of 8.77%, totalling US$ 211.4 billion, while imports during these six months dropped by 12.23%, amounting to US$ 326.98 billion.