Export growth decelerates in July as global uncertainty rises

The country’s merchandise exports in 2022 grew by 2.14 percent (y-o-y) to $36.27 billion, showing signs of flattening, with major sectors including engineering goods, ready-made garments, precious stones, jewelry and pharmaceuticals recording declines.

The trade deficit nearly tripled to $30 billion in July with imports increasing 43.61 percent to $66.27 billion fueled by items such as petroleum products, coal, vegetable oil, fertilizers, chemicals and electronic goods, according to rapid estimates released by the Ministry of Commerce and Industry on Friday. .

Preliminary trade data for July, released by the government on Aug. 2, estimated merchandise exports at $35.24 billion and imports at $66.26 billion.

Commodity exports from April to July 2022 recorded a growth of 20.13% to reach $157.44 billion, while imports grew by 48.12% to $256.43 billion. The trade deficit doubled in April and July 2022 to $98.99 billion from $42.07 billion in the same period last year.

India’s merchandise exports in June 2022 grew by 23.52 percent to $40.13 billion, according to rapid estimates released last month.

signs of slowdown

Exporters’ organization FIEO warned that signs of a possible slowdown in exports could be seen as global stocks rose. Factors such as inflation reducing purchasing power in most economies, recession that has already begun in some developed countries, and the shift in consumption from goods to services as economies open up after the Covid-19 pandemic, are hurting commodity exports.

The decline in exports of engineering goods in July reflects weaker demand from major markets in India. Recession fears in the West added to the uncertainty. While geopolitical risks remain high and pose downside risks to growth, the recent downturn in commodity prices has been a relief, said Mahesh Desai, Chairman, EEPC India.

Non-oil and non-petroleum exports and jewelry in July recorded a growth of 1.55 percent to reach $26.62 billion, according to the official statement.

Non-oil, non-precious stones and jewelry imports (gold, silver and precious metals) recorded a growth of 42.91 percent in July 2022 to $38.45 billion in July 2022.

India’s exports touched an all-time high of $420 billion in 2021-2022, but exports are yet to be estimated for the current budget as global uncertainty persists.

Major sectors that led export growth during the first four months of the fiscal year include petroleum products, engineering goods, precious stones and jewellery, chemicals, pharmaceuticals, electronic goods, garments and rice.