India's exports declined 2.6% YoY in September amid global headwinds
India's merchandise exports dipped by 2.6% year on year to $34.47 billion in September, as the nation's outbound shipments felt the pinch of slowing global demand. Imports also took a hit, dropping by 15% to $53.84 billion in September 2023 compared to the same period last year. This larger decrease in imports led to India's trade deficit hitting a 5-month low of $19.37 billion, a year-on-year (YoY) drop of over 30% from $27.98 billion recorded in September 2022.
Positive signs are emerging despite the overall decline
Despite the overall decline in exports, Commerce Secretary Sunil Barthwal pointed out that non-petroleum and non-gems & jewelry merchandise exports saw a 1.86% increase in September. Barthwal remains optimistic for the coming months, stating, "Our falling export trend is reversing as green shoots show up. For the remaining six months, there should definitely be positive growth in our exports." He also mentioned that weekly trends received by the Ministry of Commerce have already been positive in October.
Services exports saw a marginal uptick, while imports dropped
Services exports reached $29.37 billion, showing only a slight increase from the corresponding period last year when exports stood at $29.22 billion. In contrast, services imports experienced a significant drop, falling from $16.27 billion in September last year to $14.91 billion this year. For the first half of 2023-24, exports were down 8.7% YoY, while imports were 12.2% lower.
Negotiations for an India-UK Free Trade Agreement are underway
Barthwal also shared that negotiations for the India-UK Free Trade Agreement (FTA) are ongoing and differences are being ironed out. The FTA is expected to boost trade between United Kingdom and India and provide opportunities for Indian exporters to expand their market reach.
Electronic goods, iron ore, pharmaceuticals emerged as top-performing export commodities
Electronic goods, iron ore, drugs and pharmaceuticals, ceramics, and oil meals emerged as the top-performing commodities in terms of exports in the first half of FY24. Gems and jewelry, organic and inorganic chemicals, engineering goods, and readymade garments of all textiles saw a decline in exports. China remained the top importer of merchandise to India, although there has been a significant reduction in the number of merchandise imports.
