India (Commonwealth) _ Despite international challenges, India’s total exports in the fiscal year that concluded on March 31 hit a record $776.68 billion, the Indian commerce ministry said Monday.
The gain was led by robust services exports, which made up for a 3.11% decline in item exports, even if it was only a slight increase over the previous year’s $776.40 billion, a record at the time.
In FY24, services exports increased by 4.4% to a record $339.62 billion, while merchandise exports decreased to $437.06 billion. The nation’s total trade deficit decreased from $121.62 billion in FY23 to $78.12 billion in FY24, a 35.77% improvement.
According to Commerce Secretary Sunil Barthwal, India has overcome all obstacles and surpassed the total export figures of 2022–2023, attributing the positive increase to the government’s goal of extending its export basket and investigating new markets.
Barthwal said that total export growth was good on a high base and pointed out that the fiscal year’s other significant accomplishment was the significant decrease in the trade deficit brought about by the policy’s emphasis on import substitution and reducing nonessential imports.
In reference to the crises in Gaza and Ukraine, he continued by saying that exports are entirely reliant on demand from international markets, which was down due to unfavorable geopolitical circumstances.
He said that the government’s plan to investigate new markets and add new goods to its export portfolio contributed to sustaining the momentum from the previous year (2022–23). He claims that while Indian exporters are better equipped in 2024–2025, they nonetheless face new difficulties.
He stated that they are closely monitoring the situation and will respond appropriately to the current escalation of the Israel-Iran confrontation. March saw a strong decline in imports of 5.98% to $57.28 billion, while merchandise exports decreased slightly by 0.67% to $41.68 billion.
India’s merchandise exports in 2023–24 decreased by 3.11% to $437.06 billion from $451.07 billion in 2022–23, according to the preliminary data that was made public on Monday.
In 2023–2024, merchandise imports decreased by 5.41% to $677.24 billion, compared to $715.97 billion in 2022–2023.
India’s services exports increased while its imports decreased. The expected value of services exported in 2023–2024 was $339.62 billion, a 4.39% increase over the $325.33 billion earned in 2022–2023. The anticipated value of services imports decreased by 2.46% from $182.05 billion in FY23 to $177.56 billion in FY24.
Ashwani Kumar, president of the Federation of Indian Export Organizations (FIEO), highlighted the export industry’s tenacity and commitment in the face of global difficulties, citing key growth drivers such as electronics, pharmaceuticals, engineering goods, iron ore, cotton yarn, and handloom items.
It “goes to demonstrate not only the firm resolve of the entire exporting community but also of our resilient, gritty, and vibrant exports sector of the economy.”
He continued by saying that “such an impressive increase” in overall export growth in spite of geopolitical tensions like the war in Russia, Ukraine, and the Red Sea crisis, as well as the tight monetary stance of developed-world central banks and declining commodity prices, demonstrates the sector’s commitment and dedication, which has been overcoming such obstacles ever since COVID.
Since these industries are primarily labor-intensive, Kumar added that the fact that electronic goods, medicines, engineering goods, iron ore, cotton yarn, and handloom items were the main growth drivers of merchandise exports in FY24 was a “good sign.”
The reduction of the merchandise trade deficit in March 2024 is anticipated to have a positive impact on the current account balance in the fourth quarter of FY2024, according to Aditi Nayar, chief economist at ICRA Ltd. Amid a halving of gold imports and a decline in non-oil non-gold imports, India’s goods trade deficit decreased to an 11-month low of $15.6 billion in March 2024, following the levels observed in the same month the previous year.
This was mostly due to a bigger YoY decline in item imports compared to such exports. According to Nayar, this should bode positively for the current account number in Q4 of FY2024.
