India’s overall exports hit record $776.7 bn in FY24

The country’s overall trade deficit improved by 35.77% from $121.62 billion in FY23 to $78.12 billion in FY24.

New Delhi India’s overall exports reached a record $776.68 billion in the financial year ended March 31, despite global headwinds, according to provisional data released by the commerce ministry on Monday. The increase, while marginal over the previous year’s $776.40 billion, a record at the time, was driven by strong services exports, which compensated for a 3.11% contraction in merchandise exports.

Merchandise exports fell to $437.06 billion in FY24, while services exports grew by 4.4% to a record $339.62 billion. The country’s overall trade deficit improved by 35.77% from $121.62 billion in FY23 to $78.12 billion in FY24.

“We have beaten all the odds as we have surpassed the overall (exports) figures of 2022-23,” said commerce secretary Sunil Barthwal, attributing the positive growth to the government’s strategy of exploring new markets and expanding its export basket.

Barthwal contended that the overall exports growth was positive on a high base and noted that the other major achievement in the fiscal year was the sharp reduction in trade deficit due to policy focus on import substitution and curbing non-essential imports.

He added that exports are completely dependent on demand from global markets that was depressed because of adverse geopolitical developments, alluding to the conflicts in Ukraine and Gaza.

The government’s strategy to explore new markets and expand its export basket with new products helped in maintaining the last year’s (2022-23) momentum, he said. According to him Indian exporters are better prepared in 2024-25, but there are new challenges to cope with too. Commenting on the recent escalation of the Israel-Iran conflict, he said: “We are monitoring the situation and will take appropriate action.”

In March , merchandise exports fell marginally by 0.67% to $41.68 billion, while imports fell sharply by 5.98% to $57.28 billion.

According to the provisional data released on Monday, India’s merchandise exports in 2023-24 fell by 3.11% to $437.06 billion as against $451.07 billion in 2022-23. Merchandise imports in 2023-24 too fell, by 5.41% to $677.24 billion as against $715.97 billion in 2022-23.

In services, India saw expansion in exports and contraction of imports. Services export in 2023-24 were estimated at $339.62 billion, 4.39% up from $325.33 billion achieved in 2022-23. Services imports were estimated at $177.56 billion in FY24 as compared to $182.05 billion in FY23, a contraction of 2.46%.

Federation of Indian Export Organisations (FIEO) president Ashwani Kumar praised the resilience and dedication of the exports sector despite global challenges, picking out electronic goods, drugs and pharmaceuticals, engineering goods, iron ore, cotton yarn, and handloom products as major growth drivers. It “goes to show not only the firm resolve of our resilient, gritty and vibrant exports sector of the economy but also of the overall exporting community.”

He added that “such an impressive increase” in overall exports growth despite the geopolitical tensions such as the Russia Ukraine war and the Red Sea crisis, the tight monetary stance of central banks in the developed world and falling commodity prices , highlights the dedication and commitment of the sector, which has continuously been braving such odds post Covid.

Major growth drivers of merchandise exports in FY24 were electronic goods, drugs and pharmaceuticals, engineering goods, iron ore, cotton yarn, and handloom products, a “good sign” as these sectors are mostly labour-intensive, Kumar said.

Aditi Nayar, chief economist at ICRA Ltd, said the easing of the merchandise trade deficit in March 2024 is expected to augur well for the current account number in the fourth quarter of FY2024. “Led by a larger YoY decline in merchandise imports vis-à-vis such exports, India’s merchandise trade deficit eased to an 11-month low of $15.6 billion in March 2024, while also trailing the levels seen in the year-ago month, amid a halving of gold imports and a fall in non-oil non-gold imports. This is expected to augur well for the current account number in Q4 FY2024,” said Nayar.

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