India's exports contract by 2.6% in September; trade deficit narrows, imports decline

New Delhi: Exports contracted by 2.6 per cent to $ 34.47 billion in September even as the country's merchandise trade deficit narrows to $ 19.37 billion during the month under review, according to the government data released on Friday.

Easing commodity prices helped in cutting down the country's import bill by 15 per cent to $ 53.84 billion in September, the 10th consecutive month of decline. During April-September this fiscal, exports contracted by 8.77 per cent to $ 211.4 billion. Imports during the six-month period fell by 12.23 per cent to $ 326.98 billion, leaving a trade deficit of $ 115.58 billion.

Briefing media on the trade data, Commerce Secretary Sunil Barthwal said that the September figures are reflecting that "green shoots" are visible at exports front despite global challenges. He expressed hope that in the remaining six-months, the country's outbound shipments would register positive growth. The contraction which was there in double digits during April, May, June and July, is now in single digits, he said, adding, "there is an optimism which we will see in the coming months" also. The weekly exports trend during the current month is showing a positive movement, he added.

The World Trade Organisation (WTO) has forecasted that the global trade will grow only by 0.8 per cent in 2023. Despite this, Barthwal said that India's exports are doing 'well' and in fact entering new markets also like Turkey for office equipment; and Finland, Malta and Philippines for drug formulations.

When asked about the reasons for dip in imports, he said the country's import substitution policy is working well and global commodity prices including crude oil have also come down. The government has revised its August exports figure to $ 38.45 billion from $ 34.48 billion, while imports numbers were updated to $ 60.1 billion from $ 58.64 billion. Due to this revision, the exports in August recorded a growth of 3.88 per cent.

According to the data released by the government on September 15, it had showed a decline of 6.86 per cent. When asked about this high upward revision of about $ 4 billion in August, the secretary said sometimes the shipments go out but those numbers do not get recorded for some reasons, and; sometimes customs withholds some consignments for scrutiny, so that data also not get released. Further in September, exports of 12 out of the 30 key sectors exhibited positive growth and that included iron ore; cotton yarn/fabrics; meat, dairy and poultry products; pharma; engineering; and marine products. Sectors which recorded negative growth included petroleum products, textiles, electronic goods, chemicals, gems and jewellery, leather, tea and coffee.

At imports front, 20 out of 30 key sectors exhibited negative growth in September and that included silver; fertilisers; transport equipment; coal, coke; vegetable oil; pearls, precious and semi-precious stones; crude oil; chemicals; and machine tools. Oil imports in September dropped by 20.32 per cent to $ 14 billion. During the first half of this fiscal, the imports declined by 22.81 per cent to $ 82.3 billion.

On the other hand, gold imports in September rose by seven per cent to $ 4.11 billion. During the first half of this fiscal, the imports grew by 9.8 per cent to $ 22.2 billion. Further as per the data, services exports in September are estimated at $ 29.37 billion compared to $ 29.2 billion a year ago. Imports stood at $ 14.91 billion against $ 16.27 billion. The estimated value of services exported in April-September 2023 was $ 164.89 billion compared to $ 156 billion in April-September 2022.