VINACHEM

India’s merchandise exports declined for the second month in a row in January, falling by 6.6% year on year to $32.9bn, due to continued weakness in demand from the US and Europe.

Exports have now declined on a year-on-year basis in three of the 10 months of India’s current fiscal year ending April 2023, according to data from the Ministry of Commerce on 15 February.

Imports also fell for the second straight month in January, down by 3.5% year on year to $50.7bn, as global commodity prices eased while India’s gold imports slumped by 70.8% to $697m.

India posted a January trade deficit of $17.8bn – the lowest recorded in a year – down from December’s $23.8bn deficit.

In April 2022-January 2023, India’s total merchandise exports grew 8.5% year on year to $369.3bn, while imports jumped 22% over the same period to $602.2bn, bringing the trade deficit to $233bn.

Domestic demand is projected to remain strong, according to the commerce ministry, but the global economic slowdown will weigh down on India’s exports.

“We are optimistic that the growth momentum [for GDP and exports] would continue despite strong global headwinds,” Ministry of Commerce secretary Sunil Barthwal said.

January exports of petroleum products increased 8.0% year on year to $4.94bn, while those of organic/inorganic chemicals and pharmaceutical products fell by 4.6% to $2.4bn, and 2.6% to around $2bn, respectively.

Continued geopolitical tensions between Russia and Ukraine, tightening global financial conditions and a contraction in global demand were all behind the decline in India’s January exports, Federation of Indian Export Organisations (FIEO) president A Sakthivel said.

“The coming months are going to be a little challenging unless both global economic growth and geopolitical situation improve drastically,” he added.

Textiles, plastic and linoleum exports continued to decline in January 2023 because of subdued demand due to recessionary effects in major economies, the commerce ministry statement said.

On a year-on-year basis, January man-made fabrics and yarn exports fell by 21.1% to $396.8m, while plastics shipments fell by 31% to $584.1m.

Imports of crude petroleum and products for the month rose by 18.8% to $14.7bn, backed by strong cargo intake from Russia.

While imports of organic and inorganic chemicals’ fell by 15.56% to $2.3bn, those of artificial resins and plastic materials were flat at $1.8bn.  – ICIS –