In March, India's goods exports reached a 12-month high of USD 41.68 billion, despite a 0.67 per cent decrease from last year's figure. Meanwhile, imports decreased by 6 per cent to USD 57.3 billion. As a result, the goods trade deficit shrank to USD 15.6 billion, the lowest it has been in 11 months.
The sharp drop in India’s import bill during March was led by gold imports, which fell a sharp 53.6 per cent in March to USD 1.53 billion, and aided by a drop in non-oil, non-gold imports. However, silver imports jumped nearly 1059 per cent to USD 816.6 million.
"The previous fiscal year was difficult from a trade point of view since not only did the Ukraine-Russia conflict continue, but other conflicts came up. There were huge issues with the Red Sea as well as recessionary trends globally. But India has beaten all the odds," said Sunil Barthwal, Secretary, Ministry of Commerce.
The exports for the month of March were relatively strong, following a figure of USD 41.4 billion in February. This helped improve the overall weak merchandise shipments tally for the year 2023-24.
Although the average goods exports for the first ten months were USD 35.4 billion, the spike in the last two months brought the total year's export figure to USD 437.1 billion, which is 3.1 per cent below the record performance of USD 451.1 billion in the previous year.
"Led by a larger year-on-year (YoY) decline in merchandise imports vis-à-vis such exports, India’s merchandise trade deficit eased to an 11-month low of USD 15.6 billion in March 2024, while also trailing the levels seen in the year-ago month, amid a halving of gold imports and a fall in non-oil non-gold imports.
This is expected to augur well for the current account number in Q4 FY24, which may witness a small, transient surplus of USD 1-2 billion in the quarter," said Aditi Nayar, Chief Economist, Head Research and Outreach, Icra.
Goods imports dropped by a sharper 5.41 per cent to USD 677.24 billion in 2023-24, which helped moderate India’s trade deficit for the year to USD 240.2 billion, 9.33 per cent lower than the preceding year.
“Despite several adverse events, such as disruptions in the global supply chains, tussles in the Red Sea, escalation in geopolitical developments and high-interest rates, and volatility in commodity prices, India’s exports are able to make a positive move in 2023–24. The exports increased from USD 776.4 in 2022–23 to USD 776.6 in 2023–24,” said Sanjeev Agrawal.
While official numbers for Services exports are only available till February, the Commerce Ministry estimated that they shrank 6.2 per cent in March to USD.5 billion, while imports dropped 6.6 per cent to USD 15.8 billion.
“We look forward to a great growth trajectory in the current financial year 2024-25 at the back of increased demand for Indian goods in foreign markets, supported by the ease of doing exports in the country.
As supply chains become stronger with the Middle East and European markets, the export trajectory is expected to perform better in the current financial year,” added Agrawal.
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