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OpinionsIndia’s Foreign Trade has hit a bump in the face of...

India’s Foreign Trade has hit a bump in the face of Global uncertainties



All is not well with 's exports this financial year and the global uncertainties has made matters worse when one reads between the lines the data of exports of goods and services in the first half of this financial year 2023-24. This meant that India's dream of achieving $ 1 trillion exports of goods and services in next year or two will get pushed further.

According to trade expert and for senior economic advisor in the finance ministry, H A C Prasad, this is mainly due to the negative growth in merchandise exports of (-) 3.1 per cent in September 2023 and (-) 8.77 percent in April-September 2023. Services exports grew marginally by 0.51 per cent in September 2023 and by a moderate 5.65 percent in April-September 2023.
The fall in merchandise exports and moderate growth of services exports in April-September 2023 is partly due to the base effect, as there was a high growth in merchandise exports (16.89 percent) and a high growth in services exports (27.26 per cent) in April-September 2022, which in turn is due to the post-covid pick up in exports, Prasad said.
The decline came at a time when economic growth is projected by IMF to slow down to 3 per cent in 2023 from 3.5 per cent in 2022 and decelerate further to 2.9 per cent in 2024. Also the deceleration is notably in advanced economies, which is not good as India's exports to advanced economies is significant.
“But what is really worrying for us (India) is that World trade volume (goods and services) growth is projected to decelerate sharply from 5.1 per cent in 2022 to 0.9 per cent in 2023,” Prasad said adding in case of advanced economies , import growth is is projected to decelerate from 6.7 per cent in 2022 to 0.1 per cent in 2023 and exports slowdown from 5.3 per cent in 2022 to 1.8 per cent 2023.
There are other downside risks as well that growth in services growth, particularly is expected to be slower coupled with likely surge in oil prices in the face of War in the middle-east.

Prasad said sector-wise services exports data for April-September 2023-24 are not yet available. But as per RBI's balance of payment data, services exports in the first two quarters of this financial year was moderate at 5.89 per cent and 5.65 per cent respectively. High negative growth was registered in Transportation (-24.77 per cent), which is also a reflection of the fall in merchandise exports. Communication services clocked negative 13.54 per cent.

Summing up, Prasad said the silver lining in India's exports is that there are some positive signs including recent removal of trade barriers in Indo-US bilateral trade but the dampener could be prolonged Gaza war and weakened European . IPA

The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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