Despite global slowdown, export of agro and select manufacturing sectors post positive growth: Kalantri

Exports
India’s merchandise exports declined close to 7% in August 2023 due to a sharp fall in oil exports, which contracted 31%, reflecting weak global demand. Although we are seeing contraction in merchandise exports consecutively for the last seven months, the pace of contraction in August 2023 has moderated due to better performance in agro, pharma and engineering goods. Eight out of 13 agro products have exhibited a positive export growth which is an encouraging sign for India’s farm sector, and it also indicates the positive effect of our new trade agreements. Another favourable indication is that exports from the non-oil and non-agro categories such as ceramics and glassware, pharma, handloom, yarn have also been showing growth over the last seven months, despite global economic slowdown.

Trade deficit in August 2023
India’s trade deficit in August 2023 has risen to its highest level since October 2022 largely driven by deficit in the non-oil category due to a sharp rise in gold imports. Non-oil trade deficit is more than 2.5 times the oil trade deficit in August 2023.

Trade deficit in April-August 2023
Even though the merchandise trade deficit for the first five months (April-August) of the current FY has already crossed the USD 100 billion mark, the trade deficit is manageable, considering that it is lower than 10% of the trade deficit in the corresponding period of last year.

Outlook
We expect export growth to remain in negative territory in the coming months as well due to weak global economic conditions, although we may see some recovery ahead of the festive season towards the end of the calendar year.