India's foreign trade crosses $800 bn in H1 2023; 2.5% YoY fall: GTRI

Exports of goods and services rose by 1.5 per cent to $385.4 billion between January and June this year against $379.5 billion during the same period last year, a GTRI analysis said.

Such imports, however, dipped by 5.9 per cent to $415.5 billion during the period compared to $441.7 billion during the same period last year.

Goods exports, however, dipped by 8.1 per cent to $218.7 billion during the period, while such imports contracted by 8.3 per cent to $325.7 billion.

Eleven of 29 product categories contributing to 25 per cent of India's exports registered positive export growth during the period compared to the same period last year.

However, exports in 18 of 29 product categories contributing to 75 per cent of total merchandise exports declined during the period, the report said. These include textiles, carpets, garments, footwear and leather.

Out of 240 countries to which India exports, outbound shipments declined to 134 destinations. Countries to which exports declined include the United States, the United Arab Emirates, China, Bangladesh and Germany. Countries to which exports grew include the Netherlands, the United Kingdom and Saudi Arabia.

The world trade outlook for this year is weak due to a number of factors, including the ongoing war in Ukraine, high inflation, tighter monetary policy and financial uncertainty, GTRI co-founder Ajay Srivastava told a news agency.

"But these factors will soon be overshadowed by a spate of new subsidies and protectionist measures by the EU [European Union] and USA. For example, in the first seven months of 2023 alone, the EU has introduced five regulations on climate change and trade, each of these are essentially measures to curb imports," he was quoted as saying.

India should continue to focus on increasing product quality and supply chain competitiveness, he said, adding that as every big country is into inward mode, India should not surrender its policy space especially in new issues in free trade agreements (FTAs) and the Indo-Pacific Economic Framework for Prosperity (IPEF).

He suggested the government be ready to use targeted and precise retaliation to counter unilateral policy decisions like the Carbon Border Adjustment Mechanism or the EU Deforestation Regulation.

During H1 2023, the top 15 countries with which India had the highest trade deficit included China ($38.1 billion), Russia ($29.6 billion), Saudi Arabia ($12.9 billion), Iraq ($12.5 billion) and Switzerland ($7.5 billion).

The share of FTA partners in India's merchandise exports declined from 30.1 per cent in the first six months last year to 26.8 per cent this year. This includes total merchandise exports and not the preferential exports for which data is not in public domain.

ALCHEMPro News Desk (DS)