Electronic goods, drugs and pharmaceuticals, and iron ore have emerged as standout sectors in the country’s export basket amid a slowdown in global trade.
However, other prominent export segments such as gems and jewellery, petroleum products, and engineering goods, either registered a sharp decline or remained unchanged.
The global economy has been grappling with rising inflation and high interest rates, particularly in Europe and the US, India’s biggest export markets. That said, there have been signals that some of these factors might ease this year.
India’s trade performance in 2024 will be influenced by other global events such as the Red Sea impasse, and expensive crude oil on account of the continuing Russia-Ukraine war, said Ajay Srivastava, co-founder of economic think tank Global Trade Research Initiative.
Other factors include US-China trade tensions, and the European Union’s Carbon Tax and Forest regulations that can make exports to the region difficult.
Between April and November, exports of electronic goods jumped 23.38% annually to $17.73 billion, according to data from the government’s Niryat website (National Import-Export Record for Yearly Analysis of Trade).
Exports of drugs and pharmaceuticals during the period rose by 8.09% to $16.56 billion, while exports of iron-ore surged 204.4% to $2.07 billion.
The export of cotton yarn and handloom products rose by 5.75% to $7.73 billion, and that of ceramic products and glassware by 21.16% to $2.92 billion.
Smartphone exports exceeded $9 billion during the period, according to the India Cellular and Electronics Association.
In other key sectors, however, exports declined.
Exports of agricultural produce and coffee remained flat during the April-November period. Gems and jewellery exports fell by about 19.05% annually to $21.41 billion, and the export value of petroleum products fell to 12.53% to $52.71 billion.
India imports diamonds and crude oil since it doesn’t produce these commodities in any significant quantity. But it exports refined petroleum products, and gems and jewellery, making value additions in the process.
Exports of engineering goods also fell during the April-November period, by 1.55% annually to $69.41 billion.
During November, India’s goods trade deficit fell almost 35%, after widening to a record high in October.
Merchandise trade deficit fell from $31.46 billion in October to $20.58 million in November, largely because imports declined to $54.48 billion against the $65.03 billion recorded in October, commerce ministry data showed.
Merchandise exports rose to $33.90 billion in November, marginally up from $33.57 billion in the previous month.
Meanwhile, services exports stood at $28.69 billion in November, almost unchanged from $28.70 billion in October.
According to the World Trade Organization, trade slowdown in the first half of 2023 has impacted a large number of economies and a wide array of goods, which include certain categories of manufactured goods such as steel, office and telecom equipment, textiles and clothing.
Srivastava, however, said there’s scope for some optimism.
“As India’s share in world trade is just 2%, focus on enhancing sectoral competitiveness in labour-intensive sectors, diversification of services sectors, and honest ease-of-doing-business initiatives can surprise us with some good export performance,” he said.
