India’s trade deficit narrowed to 21 months low of $15.24 billion in April as import bills declined sharply due to cooling down of commodity prices and reduced demand for products considered discretionary spending like gems and jewellery.
The value of merchandise imports fell to $49.90 billion in April 2023 from $58.06 billion in April 2022, registering a decline of 14.1 per cent.
India’s merchandise exports fell to $34.66 billion in April from $39.70 billion recorded in the same month last year, recording a decline of 12.7 per cent, as per data released by the Ministry of Commerce and Industry.
Director General of Foreign Trade Santosh Sarangi said the exports have declined mainly due to poor demands in the US and Europe.
“For the next two-three months, I think the demand scenario does not look very optimistic,” said Sarangi, adding India’s exports may get better by September.
The rise in services exports helped in offsetting weakness in merchandise exports. Services exports jumped to $30.36 billion in April 2023 from $24.05 billion recorded in the same month last year.
India’s overall exports (merchandise and services combined) in April 2023 is estimated to be $65.02 billion, showing a growth of 2 per cent over April 2022.
Overall imports in April 2023 is stood at $66.40 billion, which is 7.92 per cent lower year-on-year.
Non-petroleum and non-gems & jewellery exports in April 2023 were valued at $25.76 billion as against $28.37 billion in April 2022. Non-petroleum, non-gems & jewellery (gold, silver & precious metals) imports in April 2023 valued at $31.49 billion as against $36 billion recorded in April 2022.
Engineering exports declined by around 7 per cent to $8.99 billion in April 2023 from $9.68 billion recorded in the same month last year.
“The second half of FY23 was quite challenging considering weak demand from key markets. We are still not out of the woods considering the ongoing war in Europe, slowdown in major advanced economies, high interest and geopolitical tensions,” said Engineering Export Promotion Council (EEPC) of India Chairman Arun Kumar Garodia.
“These challenges are likely to continue its adverse impact on trade,” Garodia added.
Textiles, plastic and linoleum exports continued to decline in April 2023 because of subdued demand due to recessionary effects in major economies, the Ministry of Commerce and Industry noted in a statement.
Imports of gold dipped by 41.48 per cent, while imports of pearls, precious and semi-precious stones declined by 18.73 per cent year-on-year in April. Petroleum and crude imports were down by 13.95 per cent during the month under review largely due to lower price of energy products in the international markets.