In a significant economic development, India has witnessed a substantial drop in its trade deficit, reaching a 5-month low of $19.37 billion in the month of September. This remarkable achievement was announced by Commerce Secretary Sunil Barthwal on October 13, signifying a positive trend in the country’s economic landscape.
Positive Indicators in September Exports
Goods exports in the month of September amounted to $34.47 billion, whereas imports stood at $53.84 billion. A notable point to highlight is that the September exports showed an increase of 1.86 percent when excluding the categories of petroleum, gems, and jewelry exports. This significant growth in non-excluded exports is a clear indication of the positive direction in which India’s trade is heading.
Comparative Analysis with August Figures
To put this achievement into perspective, it’s essential to compare it with the preceding month. In August, India’s merchandise trade deficit was significantly higher, amounting to $24.16 billion. During this time, exports stood at $34.48 billion, and imports were at $58.64 billion. The drastic reduction in the trade deficit in September showcases India’s resilient efforts to manage its trade balance effectively.
Evaluating the Performance in the First Half of 2023-24
In the initial half of the fiscal year 2023-24, the Commerce Secretary revealed that exports were down by 8.7 percent year-on-year, while imports saw a significant decline of 12.2 percent. These numbers reflect the challenges and opportunities that India is facing in the global trade arena.
Key Insights from Commerce Ministry Officials
Commerce Secretary Sunil Barthwal and other officials from the commerce ministry provided valuable insights into the trade scenario:
Petroleum Exports: In September, there was an increase in the volume of petroleum exports. However, this was offset by a reduction in value terms due to the moderation in prices. It’s an essential factor to consider in India’s trade dynamics.
Commodities with Positive Export Growth: Electronic goods, iron ore, drugs and pharmaceuticals, ceramics, and oil meals have shown the most substantial export growth from April to September. This showcases India’s strength in these sectors.
Challenges in Exports: On the flip side, gems & jewelry, organic and inorganic chemicals, engineering goods, and readymade garments have underperformed in the export market. Nonetheless, there is optimism that the readymade garment sector is likely to make a comeback in the next 4-5 months.
Gold Imports: Gold imports have witnessed an increase, rebounding from the decrease experienced last year, which was influenced by import duties.
China’s Role: While imports from China are declining, it’s important to note that China remains India’s top importing destination. The changing dynamics in trade relations between these two countries are worth monitoring.
Progress on the India-UK Free Trade Agreement
In another notable development, Commerce Secretary Barthwal disclosed that negotiations on the Free Trade Agreement with the United Kingdom are in advanced stages. Despite facing challenging issues, both sides are actively working to resolve differences and finalize this crucial trade agreement. The signing of this agreement during Diwali is a possibility, making it an event of significant importance in the realm of international trade.
