Merchandise trade deficit for the month of November fell to $20.58 billion mainly due to decline in imports of gold and oil, according to data released by the government last week. Gold imports almost halved in the month, from $7.2 billion in October to $3.45 billion while oil imports fell by 22 percent from $13.71 billion in the previous month to $3.45 billion in November. On the other hand, fall in exports slowed to 2.8 percent Y-o-Y to $33.90 billion.

A deeper look into the November foreign trade data shows that while exports contracted on Y-o-Y basis in November, these figures are higher than October’s tally, which was lowest in 12 months. So, it is clear that our exports are not in good shape. The slow pace of global economic recovery and rising uncertainties due to the Russia-Ukraine War along with tensions in West Asia have fueled skepticism in markets across the world.

The data shows 15 out of the 30 major product groups contributing to export growth in November. While estimated value of service exports in November stands at $28.69 billion against $26.93 billion in November 2022, experts point out that as far as merchandise export is concerned, the government should step in with some comprehensive support measures for the sector, so that it can sail through the difficult times.

According to the World Trade Organization, global trade is likely to improve in 2024. It is also expected that with the US Federal Reserve signalling interest rate cuts and other central banks likely to take cue from it, global demand may rise in the coming months. While preparing for challenges, India, at the same time, should ready itself to take the best of these opportunities while competing with its trade rivals. Here again, the government must extend a helping hand.

I invite your opinions.