Merchandise exports from the country declined almost 7 percent to $34.5 billion in August. This is the seventh straight month of decline in goods exports. Imports, on the other hand, declined 5.23 percent to $58.64 billion, leading to a 10-month high trade deficit of $24.16 billion in August, against $20.67 billion in the previous month. These figures give hint to the not-so-good present situation of India’s external trade.

As far as merchandises export is concerned, the seventh consecutive month of fall is definitely a concern. Outbound shipments of goods from the country fell 11.9 percent so far this year as compared to 12.1 percent fall in imports. However, if we look at the at the fact that merchandise exports jumped nearly 53 percent in the last two years in comparison to a four-year low of $292 billion in FY2020-21, the situation still seems not that discouraging.

An exporters’ body has rightly pointed out that this modest performance in exports during the recent months is mainly due to sluggish demand in major economies like EU, UK and China. These are India’s major export markets and fall in demand in this markets for quite some time now is a concern. Also, sluggish growth in economies like US and Australia is negatively affecting India’s external sector.

A deeper look into the export-import figures for August 2023 shows that 15 out of 30 key export sectors witnessed positive growth during the month. Again, 5.23 percent decline in imports is a good sign though it implies, to some extent, de-growth in sectors like gems & jewellery, organic & inorganic chemicals, etc. Also, it is a positive sign that in case of several product groups, export volumes are higher though exports value has declined.

I invite your opinions.