Amid Geopolitical Crisis, Near-term Challenges To Exports Limited But Remains Monitorable

The near-term challenge to India’s exports owing to the geopolitical uncertainties seems to have been limited so far but remains a key monitorable, according to a report by Crisil Ratings. 

The report stated that barring this hiccup, forecasts of better trade growth this year by key multilateral organisations are encouraging news for the exports. “The current account remains in a safe zone with robust services trade surplus and healthy remittances,” it added. 

Among sectors that saw positive export growth were drugs and pharmaceuticals (7.4 per cent on-year in April vs 12.7 per cent on-year in March), organic and inorganic chemicals (16.7 per cent vs 39.7 per cent) and petroleum products (3.1 per cent v -35.4 per cent). 

Meanwhile, the sectors that saw a decline included engineering goods (-3.2 per cent v 10.7 per cent), gems and jewellery (-6.9 per cent v -4.6 per cent), readymade garments (-1 per cent v 1.7 per cent) and ceramic products and glassware (-6.5 per cent v 0.2 per cent).

Electronic goods exports jumped 25.8 per cent compared with 23.1 per cent last month fuelled by the Production Linked Incentive scheme (PLI) and Make in India campaign. India’s exports in April recorded positive growth in the face of the ongoing disruptions in global trade routes and uneven global growth. Imports, meanwhile, saw steeper growth, leading to a wider trade deficit.

Merchandise exports grew 1.1 per cent on-year (USD 34.99 billion v USD 34.62 billion in April last year), after registering a mild contraction (-0.7 per cent) the previous month. Merchandise imports grew 10.3 per cent on-year to USD 54.09 billion from USD 49.06 billion in April last year.