Goods exports dipped, but August tally lifts outlook

India’s goods exports faced a continuous decline, marking the seventh consecutive month of downturn in August 2023. The year-on-year data revealed a 6.86% decrease, plummeting to $34.48 billion. Key sectors like petroleum products, gems and jewellery, readymade garments, and chemicals were major contributors to this decline.

Positive Indications Amidst Decline

Despite the overall decrease, half of the top thirty export items, including engineering, electronics, pharmaceuticals, and select agricultural goods, experienced growth in August.
This positive trend sparked optimism within the government about future prospects.

Imports Witness a Downturn

Imports in August 2023 exhibited a decline of 5.23%, amounting to $58.64 billion.
This fall was primarily attributed to reduced imports of petroleum, coal and coke, pearls, precious and semi-precious stones, and fertilizers.

Trade Deficit at a Ten-Month High

The trade deficit in August 2023 reached a ten-month high, stagnating at $24.16 billion, a figure consistent with the same period in 2022.

Signs of Stabilization and Growing Optimism

Commerce Secretary Sunil Barthwal expressed confidence, noting that exports were stabilizing.
The initial pessimism was transforming into optimism, with visible green shoots in the market.
Non-petroleum exports in August 2023, totaling $28.60 billion, nearly mirrored the previous year’s exports, reinforcing the growing optimism among market players.

Industry’s Positive Outlook

Some exporters shared the optimism, with engineering goods exports finally turning positive after eight consecutive months of decline.
Industry leaders anticipated a resurgence in engineering exports in the upcoming months, citing improving global demand conditions and diminishing geopolitical concerns.

Future Prospects: Expectations of Improvement

Industry experts and leaders voiced confidence, foreseeing better growth numbers in the coming months.
Anticipated fresh orders and bookings for the Christmas and New Year season were expected to drive export growth.

April-August 2023 Overview: Contractions and Shifting Dynamics

In the broader context, from April to August 2023, exports contracted by 11.9% to $172.95 billion, while imports experienced a 12% decline, totaling $271.83 billion.
However, the trade deficit in this five-month period narrowed to $98.88 billion, compared to $112.85 billion in the same period the previous fiscal year.
Non-petroleum exports during April-August 2023 were 7.3% lower, amounting to $141.29 billion, compared to the corresponding period in the previous year.

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