Exports continue to plunge for the fourth month in a row in August 2023

As Exports continued to slow in August 2023 due to weak demand in the West and China, India’s trade gap touched a new high in the last ten months. The global economic situation looks grim due to sustained geo political tensions which kept the inflation and interest rates at elevated levels

Commerce ministry data released on September 15^thshowed  that exports slipped nearly 7 per cent  to 34.48 billion US dollars in August from 37.02 billion US dollars a year earlier. Meanwhile, imports declined to 58.64 billion US dollars from 61.88 billion US dollars last year, leaving the trade balance at 24.16 billion US dollars.

Exporters expressed worry over the plunge in shipments of gems and jewellery, and organic and inorganic chemicals, that fell 22 per cent and 18 per cent respectively. Easing global fuel prices impacted earnings from refined petroleum exports, resulting in a sharp 30 per cent drop. Cereal exports also fell over 40 per cent due to export restriction to arrest domestic prices.

However, engineering goods exports recovered to register a growth of 8 per cent in August after eight consecutive months of year-on-year decline. Official data showed that engineering goods exports stood at 9.05 billion US Dollars in August 2023 as against 8.40 billion US dollars last year. A spokesman of Engineering Exports Promotion Council of India said various factors including a slowdown in key advanced markets and muted overall demand had led to lower exports of engineering goods in previous months.

Exports of electronic goods rose by 26.29 per cent in August to 2.17 billion US dollars. During the April-August period, they rose by 35.22 per cent  to11.18 billion US dollars. Further, services exports in August are estimated at 26.39 billion US dollars compared to 26.5 billion US dollars a year ago. Imports stood at 13.86 billion US dollars against 15.22 billion US dollars.Meanwhile, gold imports in August rose by 38.75 per cent to 4.93 billion US dollars,.

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Owing to the sharp sequential uptick in merchandise imports in August 2023, the merchandise trade deficit widened to a 10-month high of 24.2 billion US dollars during August, while printing marginally lower than that seen in the year-ago levels..

Commerce secretary Sunil Barthwal said orders were beginning to pick up, and that the export pessimism was changing to optimism. However, demand from the European Union remains a concern in light of recent rate hikes, he added. Earlier this week, the European Central Bank raised rates to an all-time high of 4 per cent amid the Russia-Ukraine war and continued oil production cuts by OPEC countries.