Four of India’s top five merchandise exports, in value terms, fell or were flat during the first ten months of the current fiscal year.
These include engineering goods, which comprise 25% of all exports in value terms, petroleum products (19%), gems and jewellery (8%), and chemicals (6%).
Electronic goods, which account for 6% of India’s total export value, showed significant growth in April-June to $22.64 billion from $18.78 billion a year ago.
The total export value of engineering goods remained flat at $88 billion during April-January compared with the year-ago period.
The total export value of petroleum products declined to $67.11 billion during the first 10 months of the fiscal year, down from $75.65 billion in the year-ago period.
Earnings from petroleum shipments fell steeply due to the global economic slowdown, a rise in domestic consumption, and shrinking discounts on Russian oil.
Gems and jewellery exports declined to $26.89 billion during the first 10 months from $31.61 billion in the year-ago period.
Export of chemicals, both organic and inorganic, in value terms, fell to $22.64 billion during the April-January of FY24, down 11.7% from the year-ago period.
Overall, India’s export values across all commodities declined to $351 billion during April-January from $366 billion a year ago, underlining the impact of global economic slowdown and tightening of interest rates in Western countries.
Challenges like geopolitical tensions in Ukraine and West Asia, as well as trade route disruptions in the Red Sea region, have exacerbated the situation by increasing oil prices and transport costs, thus hurting India’s exports.
Despite these setbacks, global trade is expected to stabilise in FY2025. “Many of the world’s largest economies held up reasonably well considering the sheer breadth of the headwinds they faced in the last two years, including high interest rates, the stress in interest rate-sensitive and energy-intensive industries, volatile commodity prices, fiscal consolidation, a strong dollar and conflicts in places integral to the global economy,” rating agency Moodys said in its latest global macroeconomic outlook report.
“We expect a steady normalization in economic activity through this year (CY2024) and next (CY2025) across advanced and emerging market countries,” it added.