Indian exports likely to be hit due to Recession in Germany

Germany’s economic recession will impact India's exports from various sectors including chemicals, machinery, apparel and electronics to the European nation. This was stated by Sanjay Budhia, Chairman of the Confederation of Indian Industry committee on EXIM, according to a media reports.

The chairman said it was too early to assess the impact of the recession in Germany on Indian exports.

Germany’s recession came in following its Gross Domestic Product (GDP) downfall in the first quarter of 2023 by 0.3 per cent and 0.5 per cent in the fourth quarter of the last year.

India mainly concentrated to export organic chemicals, electronics, apparel, machinery, footwear, leather goods and articles of iron and steel to Germany, contributing to a total of 4.4 per cent during 2022. The sectors have been greatly impacted by the German recession, he said.

Around 14 per cent of India's total exports are from the EU, with Germany being the top destination of Indian exports, followed by other countries like the Netherlands, Belgium, Italy, and France. With the largest economy facing a recession, the EU as a whole is bound to feel downward pressures, the chairman added.

The think-tank Global Trade Research Initiative (GTRI) has estimated a 2 billion US dollar impact on India’s export including products like smart phones, apparel, footwear and leather goods.

Commenting on the investments from Germany, he said the European recession might have an impact on its investments in India seeking cheaper alternatives for German companies during recessionary conditions. This may lead to a minimized effect on German investments in India, Budhia added.