EXPORT STATISTICS - ECONOMY

News: Exports fell to six-month low in April on anemic demand

 

What is in the news?

       India’s merchandise exports shrank 12.7% in April to a six month low of $34.66 billion but imports fell by a sharper 14% to hit $49.90 billion, as per initial estimates.

 

Key takeaways from the news:

1. Cooling of trade deficit:

       The monthly goods trade deficit cooled 17% in April to touch a 20month low of $15.24 billion, from $18.35 billion a year earlier.

       Outbound shipments fell 17.3% from March’s $41.9 billion, which was the highest exports level since June 2022.

2. Decreasing petroleum prices:

       Petroleum prices have been relatively cooling and the impact is visible both on imports and exports. This happened due to import of cheap oil from Russia which accounted for more than 35% of the country's crude oil imports.

3. Non-oil items contribution:

       Year-on-year decline in the merchandise trade deficit in April was driven primarily by non-oil items, with the fall in crude oil prices partly absorbed by higher volumes.

4. Contraction of core exports:

       Exports of non-petroleum products and non-gems and jewelry, also known as core exports, contracted 9.2 per cent in April to $25.76 billion.

 

Reasons for the decline in exports:

 

1. Faltering demand in key markets of India like USA, UK, European Union.

2. A decline in commodity prices in foreign markets triggered Indian exporters to reduce their exports.

3. Due to China's zero covid policy, India's exports to that nation have been reduced significantly.

4. Due to Black Sea grain initiative, the global supply chain has been restored.

 

Initiatives taken by the government to boost the exports:

1. Champion services sector Initiative:

       12 Champion Services Sectors have been identified for promoting and diversifying services exports by pursuing specific action plans.

2. Free trade agreements:

       Government is trying to harvest more FTAs, as it will boost exports from India.

       Last year, India signed FTAs with Australia and UAE.

3. Market Access Initiative scheme:

       The Market Access Initiative (MAI) Scheme is a program initiated by the Government of India to assist Export Promotion Councils, Trade Bodies, Commodity Boards, and other organizations in promoting and facilitating exports from India.

4. Districts as export hub:

       Districts as Export Hubs has been launched by identifying products with export potential in each district, addressing bottlenecks for exporting these products and supporting local exporters/manufacturers to generate employment in the district.