India’s Trade Performance in March 2024: A Comprehensive Analysis

In March 2024, India’s goods exports surged to a 12-month high at $41.68 billion, marking a significant achievement despite a slight decrease of 0.67% compared to the previous year. Notably, the goods trade deficit narrowed to $15.6 billion, the lowest in 11 months. This boost was largely propelled by a substantial decline in gold imports by 53.6%, offset by a remarkable 1059% increase in silver imports.

Key Highlights

• Goods Exports: Reached $41.68 billion, witnessing a slight decline from the previous year but contributing to an overall improvement in the merchandise shipments for the fiscal year 2023-24.
• Goods Imports: Decreased by 6% to $57.3 billion in March, with gold imports leading the decline, while silver imports experienced a significant surge.
• Trade Deficit: Contracted to $15.6 billion, the lowest in 11 months, largely attributed to the drop in import bills, especially in gold imports.

Fiscal Year 2023-24 Overview

• Goods Exports: Despite averaging $35.4 billion in the first ten months, the spike in exports during the last two months lifted the full-year export figure to $437.1 billion, marking a 3.1% decrease from the previous year’s record performance.
• Goods Imports: Witnessed a sharper decline of 5.41% to $677.24 billion, contributing to a moderation of India’s trade deficit for the fiscal year to $240.2 billion, a 9.33% decrease from the preceding year.
• Services Trade: Although official figures are only available till February, estimates suggest a 6.2% shrinkage in services exports and a 6.6% drop in imports for March. However, overall services exports for the fiscal year are estimated to have risen by 4.4% to nearly $340 billion, while imports dropped by 2.5% to $177.6 billion.

Outlook and Projections

The easing of the goods trade deficit in March is anticipated to positively impact India’s current account balance in the final quarter of 2023-24. ICRA’s chief economist, Aditi Nayar, projects a potential small, transient surplus of about $1-2 billion in the quarter.