India’s goods exports dip by 16% to $32.25 billion in July

India’s merchandise exports slumped 15.8 per cent to $32.25 billion in July, the lowest in nine months, dragged by weak global demand, especially in major trading partners like the United States, China and European Union, government data showed on Monday. This is the sixth consecutive month of contraction in the country’s exports as slowdown grips the world economy. Exports had slumped by 22 per cent year-on-year to $32.97 billion in June. India’s exports stood at $38.34 billion in July 2022. The country’s imports fell at an even sharper pace of 17 per cent year-on-year in July 2023 to $52.92 billion from $63.77 billion in the same month last year. Trade deficit rose marginally to $20.67 billion in July from $20.13 billion recorded in the previous month.

Reacting on the data, Commerce Secretary Sunil Barthawal said exports have been under pressure due to continued global headwinds. “Most countries are reporting negative import and export growth. We too are a part of that global value chain and if I look at it from that perspective, the fall in our exports is not as high as it is elsewhere,” he said. 

 Overall exports (merchandise and services combined) declined by 5.1 per cent year-on-year to $59.43 billion in July. Overall imports dipped by 12.9 per cent to $67.77 billion during the month under review.

“India’s trade performance, after witnessing very high growth in 2022-23 has continued to show declining trends in July as compared to the high base of last year in the backdrop of global slowdown,” the Ministry of Commerce & Industry said in a statement.

Cumulative exports in April-July 2023 period stood at $136.22 billion, which is 14.5 per cent down when compared with the corresponding period of last year when it stood at $159.32 billion.

“Sluggish global demand, especially in economies like China and EU coupled with the contraction in growth has led to the continuous decline in exports during the recent months,” said A Sakthivel, President, Federation of Indian Export Organisations (FIEO).

A sharp decline in imports have led to narrowing in the trade deficit. The merchandise trade deficit in the first four months of the current financial year narrowed to $76.98 billion as against $87.99 billion recorded in April-July 2022.

Engineering exports have declined for the fourth consecutive month this fiscal. It fell by 6.6% year-on-year to $8.74 billion in July. Metal sector has significantly contributed to the declining trend over the past many months.

“Overall, the global demand has slowed down and as a result Indian engineering shipments to top destinations have shown negative growth,” said EEPC India Chairman Arun Kumar Garodia.

Electronic goods exports continued to show strong performance, increasing 13 per cent to $2.05 billion in July as compared to $1.81 billion in the same month last year. Cumulative exports of electronic goods in the first four months of the current fiscal surged by 37.6 per cent to $9.01 billion as compared to $6.55 billion during April-July 2022.