India’s goods exports slipped back into contraction to drop 2.83% in November to $33.9 billion, while imports fell by a sharper 4.33% to $54.48 billion.
Exports had recorded only their second uptick this year in October, and though the value of outbound shipments was up 1.1% on a month-on-month basis, they still marked the second-weakest level since November 2022.
The trade deficit for November eased sharply beyond expectations to $20.58 billion from the all-time high of $29.91 billion recorded in October. November’s trade deficit is 6.7% lower on a year-on-year basis and 31.2% below October’s tally.
The originally estimated deficit of $31.5 billion for October was revised downward thanks to a $1.6 billion correction from the initially released import tally of $65.03 billion.
Commerce Secretary Sunil Barthwal asserted that trade is not one-way traffic and should be seen in a global context. “GDP growth is not high in many countries and interest rates have not gone down. Although global trade is suffering, we are holding fort and our exports have beaten the global trends in 2023 by a significant margin.”
“The green shoots we saw in the last couple of months have stabilised. Exports have been positive in November and higher than the overall exports of the same month last year,” he said, referring to the total tally of merchandise exports and estimated service exports last month.
While the actual services exports numbers will be available later, the Commerce Ministry pegged November’s intangible exports at $28.69 billion, 6.5% above last year, to put cumulative exports for the month at $62.6 billion, 1.2% higher than a year ago.
“India’s merchandise trade deficit unexpectedly shrunk in November, with a better-than-expected performance of exports resulting in a narrower deficit than our projection of $23.5 billion,” said Aditi Nayar, chief economist at rating major ICRA. Ms. Nayar expects the monthly trade deficit to hover in the range of $20 billion to 25 billion through the rest of 2023-24.
Between April and November 2023, merchandise exports from India are now 6.5% down at $278.8 billion, while imports have dropped 8.7% to $445.15 billion. At $166.35 billion, the trade deficit so far this fiscal is 12.1% below the same period last year when several commodity prices had shot up after the conflict in Ukraine. Officials reiterated that though the volumes of many major export goods had increased this year, their value had reduced due to the dip in global prices.