In May 2024, India's merchandise exports reached $38.13 billion, a 9.1% increase.
Imports and Trade Deficit Rise as Exporters Look Forward to Higher Demand from Key Markets
India’s goods exports saw a notable increase of 9.1% year-on-year in May 2024, reaching $38.13 billion, driven by strong performances in sectors such as engineering goods, petroleum products, electronics, pharmaceuticals, and textiles. This rise reflects a resurgence in global demand, as per government data released on Friday.
Rising Imports and Widening Trade Deficit
Imports in May 2024 grew by 7.7% to $61.91 billion, fueled by increased shipments of petroleum, transport equipment, silver, and vegetable oil. Consequently, the trade deficit widened to $23.78 billion, marking a seven-month high.
Positive Outlook
“With inflationary pressures easing in advanced economies, consumer purchasing power has increased, leading to higher demand. We expect this growth trend to continue,” said Commerce Secretary Sunil Barthwal during a press briefing on Friday.
Exporters are optimistic about the future, with increased order bookings indicating significant growth in global trade in 2024, as projected by major international bodies like the WTO, the IMF, and the OECD. In 2023, world trade slowed due to high inflation, rising interest rates, and sluggish demand.
“We anticipate better export growth with improved demand from the European Union, UK, West Asia, and the US. This boost in order bookings by over 10% signals a recovery for labor-intensive export sectors,” said Ashwani Kumar, President of the Federation of Indian Export Organisations (FIEO).
Strong Start to FY25
India’s exports declined by 3.1% to $437 billion in 2023-24, but FY25 began positively, with exports growing in both April (approximately 1%) and May. Total exports for April-May 2024 increased by 5.1% to $73.12 billion. Imports during this period rose by 8.89% to $116.01 billion, resulting in a trade deficit of $42.89 billion compared to $36.97 billion in April-May 2023.
Sector-Specific Declines
Products that saw a decline in exports in May 2024 included gems and jewellery, marine products, iron ore, cashew, and oil meals. Notably, there was a 20% drop in spice exports to $361.17 million, following recalls of certain Indian spice products in markets like Hong Kong and Singapore.
Top Export Destinations
The top five export destinations in May 2024, in terms of export growth year-on-year, were Malaysia (86.95%), the Netherlands (43.92%), the UK (33.54%), the UAE (19.43%), and the US (13.06%).
Top Import Sources
The top five import sources in May 2024, based on the rate of increase year-on-year, included Angola (1274.95%), Iraq (58.68%), the UAE (49.93%), Indonesia (23.36%), and Russia (18.02%).
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