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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