India’s merchandise exports registered a modest growth in November after recording a sharp contraction in the previous month, helping the trade deficit to narrow month on month.
Merchandise exports stood at $31.99 billion last month, up 0.59% from $31.8 billion in November 2021, according to the data released by the government on Thursday.
Merchandise exports had contracted 16.7% year on year to $29.8 billion in October.
Imports rose a marginal 3.6% to $55.88 billion in November. Trade deficit stood at $23.89 billion during the month, down from $26.91 billion in October. During April-November 2022, exports stood at $295.26 billion against $265.77 billion in the same period last year, recording a growth of 11%.
India’s merchandise exports exhibited a positive year-on-year (y-o-y) growth in 15 out of 30 sectors in November as compared to the same period last year, the commerce and industry ministry said in a statement.
Sectors that recorded positive growth include electronic goods (54.48%), gems and jewellery (4.61%), pharmaceuticals (8.66%), rice (19.16%), and leather (8.68%).
“As a thriving economy with close integration into the global value chain, certain sectors do face the challenges of slowing global demand more severely than others,” the statement said.
Industry said the bounce-back in exports is encouraging.
“The incremental growth is certainly positive development considering strong global headwinds and slowdown in major advanced economies,” said Arun Kumar Garodia, chairman of Engineering Export Promotion Council India.
Federation of Indian Export Organisations (FIEO) director general Ajay Sahai said exports moving to positive territory after a drop in October is on expected line though the challenges continue.
“The offtake has slowed down with rising inflation in most economies, affecting the purchasing power. Moreover, large departmental stores are maintaining lean inventories as credit cost of building inventories have gone up with interest rates moving northwards,” he said. “The next move by Fed (US Federal Reserve) would be very important and crucial.”
The commerce and industry ministry statement said engineering and iron ore products were one example where demand slowdown from major trade partners due to decline in economic activities had been seen. It said 15% export duty on steel had weighed on engineering exports but its removal now should improve the situation.
There is decline in exports in the chemical sector in dyes and organic chemicals due to slowdown in demand in traditional textile markets such as China, Turkey, and Bangladesh, it said.
“Indian textile exports fell due to global demand slowdown as high inflation across the developed world has reduced consumers’ purchasing capacity,” it added.
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