In the fiscal year 2023-24, as stated by RBI Governor Shaktikanta Das on Friday, both India’s exports and imports have contracted. The contraction in merchandise exports and imports persisted, albeit at a slower pace in July and August, following the Monetary Policy Committee meeting.
In August, merchandise exports and non-oil non-gold imports saw a moderated contraction. However, the RBI governor highlighted an increase in services exports, mainly propelled by software and business services.
From April to August 2023, merchandise exports (in dollar terms) witnessed a year-on-year decline of 11.9 per cent, while merchandise imports declined by 12.1 per cent. The merchandise trade deficit reduced to USD 98.9 billion during April-August 2023 from USD 112.9 billion the previous year, as the decline in imports surpassed that in exports.
Merchandise exports showed a widespread decline across various commodities. During April-August 2023, 18 out of 30 major commodities, constituting 73.9 per cent of the export basket, experienced a year-on-year decrease. This decline was led by petroleum products, gems and jewellery, and engineering goods. Conversely, electronic goods, iron ore, and drugs and pharmaceuticals, accounting for 13.5 per cent of merchandise exports, made positive contributions. Overall, non-oil exports decreased by 7.5 per cent during this period.
Regarding imports, the RBI observed that 17 major commodities, comprising 55.4 per cent of the import basket, contracted from April to August 2023. This contraction was primarily driven by petroleum and crude products, coal, and chemicals. Conversely, electronic goods, machinery, electrical and non-electrical products, and gold imports expanded. Non-oil non-gold imports decreased by 9.0 per cent.
The RBI noted that the country’s services exports were boosted by software services, business and financial services, and travel services in Q1 of 2023-24. However, services export growth substantially moderated to 6.8 per cent during April-August 2023 from 32.1 per cent a year ago, partly reflecting a slowdown in key partner countries.
