Merchandise exports for the month of December fell by 12.2 percent to $34.48 billion against $39.27 billion in the corresponding month of 2021. In contrast, imports fell to $58.24 billion against $60.33 billion YoY. Trade deficit increased to $23.76 billion against $21.10 billion YoY, but it narrowed to the lowest level in eight months from $23.89 billion in November. Overall, the foreign trade environment is not that encouraging.

There is no doubt that weak global demand has continued to weigh on India’s exports. Majority of economists are anticipating a global recession in 2023. Geopolitical tensions, volatility in currencies, high inventories – these are some major challenges our exporters are struggling with for quite some time now, and unless this situation improves drastically, the coming months would be extremely difficult for the sector.

The Budget is ahead, and it is an opportunity for the government to take comprehensive cushioning measures for the sector. According to industry watchers, this situation demands urgent steps to ensure easy liquidity at competitive cost. Extension of ECLGS, IGST exemption o­n freight o­n exports, PCFC extension, notification of RoDTEP rates are some of the major suggestions put forward by experts in this regard.

Meanwhile, engineering goods exports have suffered the brunt of the weak demand in advanced economies. Latest data shows that exports from the sector fell 12 percent to $9.08 billion in December, 2022 against $10.30 billion in December 2021. Considering this as well as the dim global economic outlook for 2023, the Centre should come up with a comprehensive policy to arrest this downfall.

I invite your opinions.