India’s merchandise exports grew just 0.59 per cent in November at $31.99 billion, as tepid external demand, geopolitical tension and recessionary trends in developed economies weighed on outbound shipments.
Exports have slowed in the last few months after sustained growth earlier in the year. India’s merchandise exports grew modestly for the first time in two years, as domestic factors and external factors affected demand.
“The global economy poses tremendous challenges in the current year as it continues to navigate an increasingly turbulent and uncertain environment. However, India’s trade is moving forward on the high growth wave even with the high base of last year and despite global demand slowdown, exports performance continues on the high growth run with India’s overall exports (Merchandise and Services combined) in April-November 2022,” said the commerce and industry ministry in a statement.
Exports showed a positive year-on-year (y-o-y) growth in 15 out of 30 sectors in November, compared to the same period last year.
Imports increased 5 per cent to $55.88 billion in November, growing in 19 out of 30 sectors (y-o-y). Trade deficit was at $23.89 billion.
“The engineering and iron ore products being one example where demand slowdown from major trade partners due to decline in economic activities. Moreover, the 15% export duty on steel weighed on engineering exports but its removal now should improve the situation,” the statement said.
The ministry said that the exports of dyes and organic chemicals declined due to demand slowing down in textile markets of China, Turkey, Bangladesh. Textile exports fell due to global demand slowdown as inflation in the developed world reduced consumers’ purchasing capacity.
India’s plastics exports also face challenging conditions this year due to signs of recession in the USA and Europe. “India’s plastic raw material exports have fallen as polymer producers prefer to sell in the domestic market since price realisations within India are currently better than the export market. With regard to the poultry export, there is a reduction due to the bird flu which has resulted in reduced demand from major importing countries,” said the ministry.