India's exports contracted by 12.7 per cent, third month in a row, to USD 34.66 billion in April even as the trade deficit reduced to a 20-month low of USD 15.24 billion, the government data showed on Monday.
The decline in exports is mainly on account of poor demand in India's key destinations -the Europe and the US - and it may take some more months for the situation to improve.
The demand scenario is "not looking very good as far as Europe is concerned, and the US also we have seen a decline in demand. For the next 2-3 months, I think the demand scenario does not look very optimistic," DGFT (Director General of Foreign Trade) Santosh Kumar Sarangi told reporters here.
However, he expressed hope that things would change from September onwards.
"There is a possibility that opening up of Chinese economy combined with some boost in demand in the Europe and the US economy from August-September onwards might give a boost to global exports," he said.
Imports too declined by about 14 per cent, fifth month in a row, to USD 49.9 billion as against USD 58.06 billion recorded in the same month last year, the data showed.
Trade deficit in April last year stood at USD 18.36 billion. The previous lowest level was recorded in August 2021, when the deficit stood at USD 13.81 billion.
On imports, Sarangi said that the decline is because of cooling down of commodity prices and reduced demand for products which are considered as discretionary like gems and jewellery.
He suggested to diversify into products which have higher export demand, such as electronic goods, oil meals, oil seeds, and agricultural goods.
He added that export sectors which may get impacted in the coming months include gems and jewellery, apparel and garments, and some engineering products.
In April, export sectors which recorded negative growth included petroleum products, gems and jewellery, engineering goods, chemicals and ready-made garments of all textiles.
However, electronic goods, pharma, rice and oil meals registered positive growth.
The shipments of electronic goods increased by 26.49 percent to USD 2.11 billion in the month under review.
Under merchandise exports, only 11 of the 30 key sectors exhibited positive growth in April and at imports front, 23 out of 30 key sectors recorded negative growth.
Crude oil imports dipped by 13.95 percent to USD 15.17 billion. Gold imports too contracted by 41.48 percent to USD 1 billion in April.
India's exports to the US in April declined by 17.16 percent to USD 5.9 billion. Similarly, to the UAE it dipped by 22 per cent to USD 2.23 billion in April.
The other key export destinations where exports reported negative growth included China, Singapore, Bangladesh, and Germany.
Further, the commerce ministry has revised upwards the overall trade figures for 2022-23.
According to the ministry's data, exports of goods and services in 2022-23 rose by 14.68 per cent to USD 775.87 billion (earlier it was USD 770 billion) as against USD 676.53 billion in 2021-22.
Imports increased by 17.65 percent to USD 894.19 billion, leaving a trade deficit of USD 118.31 billion in 2022-23.
Merchandise exports increased by 6.74 percent to USD 450.43 billion, while imports rose by 16.47 percent to USD 714 billion in the last fiscal.
Services exports rose 27.86 percent to USD 325.44 billion, while imports increased by 22.54 percent to USD 180 billion in the last fiscal.
Services exports in April this year were estimated at USD 30.36 billion, as compared to USD 24.05 billion in April 2022. The estimated value of services import in April was USD 16.50 billion as compared to USD 14.06 billion in April 2022.
(Edited by : Sangam Singh)
First Published: May 15, 2023 9:15 PM IST
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