Jan. goods trade deficit narrows sequentially to nine-month low of $17.5 billion

Exports rise 3.1%, marginally outpacing imports’ 3% growth; merchandise trade logs expansion despite Red Sea crisis and weak demand in advanced economies

Updated - February 15, 2024 10:46 pm IST

Published - February 15, 2024 08:36 pm IST

Image used for representative purpose only.

Image used for representative purpose only. | Photo Credit: REUTERS

India’s merchandise trade deficit, which had hit a record high of $29.9 billion in October, narrowed sequentially for the third straight month and touched a nine-month low of $17.5 billion in January, provisional estimates released by the Commerce Ministry on Thursday showed.

Goods exports rose for the second successive month, growing 3.1% year-on-year to $36.92 billion. However, they were 4% below December’s tally. Imports grew 3% to $54.4 billion, although they were 6.6% lower than the preceding month.

Services exports, whose actual numbers will be released later, are estimated to have expanded 17.5% last month to $32.8 billion, taking the combined export tally to $69.72 billion, 9.28% higher than a year earlier.

Commerce Secretary Sunil Barthwal said the uptick in exports was significant as it was achieved “despite the Red Sea crisis, the recessionary conditions in advanced countries and despite the falling commodity prices”. The ministry, he said, had been working with other departments to help exporters navigate the difficult situation in the Red Sea.

“We told banks that whatever credit can be extended to exporters, it should be done, while the Export Credit Guarantee Corporation and the Exim Bank were told not to increase insurance rates. Given such difficult circumstances, if we have grown, that speaks volumes about our exporters. We will continue our efforts to ensure that growth is recorded in the coming period also,” Mr. Barthwal added.

The ministry has also set up a task force to identify non-tariff barriers and issues relating to Sanitary and Phytosanitary (SPS) measures that are holding up Indian exports in certain countries.

Some countries who were not enlisting new Indian exporters, citing grounds that their existing list was big enough, had been told to delist firms which were not active and replace them with those that had the capacity to export now. Separately, efforts were underway to identify new territories for Indian exporters to tap, as well as new products that may have global demand.

Cumulative merchandise exports in the first 10 months of 2023-24 now stand at $353.9 billion, 4.9% below their tally in the corresponding year-earlier period. “The merchandise trade deficit during April-January 2023-24 is $207.2 billion, compared to $229.37 billion during April-January 2022-23... a decline of 9.66%,” the ministry said in a statement.

Out of the top 30 export sectors, 18 registered positive growth in January led by iron ore (109.8%), tobacco (47.3%), meat, dairy and poultry products (26.1%) and spices (20.5%). On the imports front, 17 sectors clocked a decline in shipment values, including fertilisers (-69.1%), project goods (-43.9%), and raw cotton (-32.3%).

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