The president of the Federation of Indian Export Organisation (FIEO), Ashwani Kumar, has projected that the nation’s merchandise exports will likely hit USD 450 billion by the end of this financial year, despite facing geopolitical hurdles such as the Red Sea crisis. He emphasised the urgency of tackling challenges arising from the Red Sea crisis by ensuring the availability of marine insurance and a moderate increase in freight charges.
Kumar highlighted the pressing need for the exporting sector, particularly Micro, Small and Medium Enterprises (MSMEs), to have access to easy and affordable credit, along with marketing support to enhance the country’s exports. He suggested that expediting the conclusion of free trade agreements, such as those with the UK and Oman, would further facilitate outbound shipments. Kumar stressed that MSMEs would play a pivotal role in achieving the government’s target of one trillion in goods exports by 2030.
Despite facing obstacles such as the Red Sea crisis, tight monetary policies in developed nations and declining commodity prices, exports during April-February 2023-24 amounted to USD 395 billion, marking a notable increase. Kumar commended the resilience of the exporting community in navigating through adversities, such as the Russia-Ukraine conflict.
Key drivers of the growth in merchandise exports in February included engineering goods, electronic goods, organic and inorganic chemicals, pharmaceuticals and petroleum products.
According to government data, India’s merchandise trade deficit widened to USD 18.71 billion in February compared to USD 17.49 billion in the previous month, as imports surpassed exports amidst the Red Sea conflict. Imports totalled USD 60.11 billion in February, up from USD 54.41 billion in January, while exports stood at USD 41.40 billion in February, rising from USD 36.92 billion in January.
Year-on-year, goods exports in February saw an 11.86 per cent increase compared to February 2023, while imports rose by 12 per cent. The trade deficit represents the variance between a country’s imports and exports.
The latest global macroeconomic outlook report by rating agency Moodys acknowledged the resilience of major economies amidst various challenges over the past two years. It anticipates a gradual return to normalcy in economic activities throughout 2024 and 2025 across both advanced and emerging market nations.
