India’s export of goods dropped for the first time this fiscal year in October 2022, dropping 16.6% to $29.78 billion (year over year). Shipments of the most of major goods, including petroleum, gems and jewelry, engineering equipment, chemicals, textiles, and medicines, suffered. According to initial estimates issued by the commerce and industry ministry for October 2022, imports rose 5.7% to $56.69 billion, driven by a strong increase in petroleum and fertilizer imports. As a result, the trade imbalance widened by 50% to $26.91 billion.
The dull export performance is largely due to weakening global demand for goods caused by high inventories, rising inflation, currency volatility, and the ongoing conflict in Ukraine, but according to Commerce Secretary Sunil Barthwal, Dussehra and Diwali celebrations in October this year may also have contributed because workers took time off for the festivities. Diwali was observed in November of 2021. Possibly a seasonal blip, I suppose. After examining the results of the November trade data, we will determine whether this is a trend that will endure, Barthwal said during a press conference on Tuesday.
He noted that these needed to be examined because the IMF had decreased GDP growth expectations and the WTO had lowered global trade growth forecasts to 1% in 2023. However, North America, the Middle East, Latin America, and some of Africa were likely to perform better than others, so that is where exporters should concentrate, noted Barthwal. April through October 2022 saw an increase in goods export of 12.55 percent to $263.35 billion. Since July, export growth has begun to slow down, therefore the first three months of the fiscal year saw the most of the rise. The seven-month period saw an increase in goods imports of 33.12% to $436.81 billion.
“There is a compelling justification to restore the interest equalization support to 5% and 3% respectively, as existed before the Covid period,” it added. Since the interest rates have risen upward and are presently higher than the pre-Covid level. India’s exports reached a record-high of $421 billion in 2021–22, expanding by nearly 40%, however, due to the current state of economic uncertainty, the Commerce Ministry has not yet provided a target for the current fiscal year. Earlier, officials had stated that the prospect of achieving exports of $450–460 billion was being considered.