Decline in Indian Exports

Table of Contents

Decline in Indian Exports Highlights

Export: Exports declined to a 20-month low in October to touch $29.78 billion.
- It is the first slide reported for any month since February 2021.
- Export sectors that recorded negative growth: Gems and jewellery, engineering, petroleum products, ready-made garments of all textiles, chemicals, pharma, marine products, and leather.
- India’s overall exports in April-October 2022 are estimated to be $444.74 billion, exhibiting a positive growth of 19.56% over the same period last year.
Imports: Imports slowed to 5.38% to an eight-month low of $56.69 billion.
- Overall imports in April-October 2022 are estimated to be $543.26 Billion, exhibiting a positive growth of 33.80% over the same period last year.
Increasing Trade Deficit: Trade deficit is the gap between exports and imports.
- It is estimated to be $29.78 billion.
- It is 66% higher than in October last year.
- A Decline in Exports in India and increase in imports widens trade deficit, putting pressure on the value of domestic currency.

Global slowdown: Slowdown in the EU & the U.S. and the Russia-Ukraine war has led to decline in demand across major markets.
Tightening monetary policy in developed world: It puts less money in the hands of the people and therefore, consumption slows down.
Export restrictions by India; Restrictions have been imposed by India on segments including wheat, steel, iron and petroleum products have also contributed to the slowdown in exports.
- It was done to increase local availability and hence temper local prices.

Increase in Private sector capital expenditure: It is about to touch six lakh crore this fiscal which would make it the highest of the past six years.
- This is expected to spur growth and job creation in the coming days.
Resilient local demand: Spike in tractor sales in September and October reflects improved sentiment.
Comfortable Foreign Exchange: For the week ended December 2, foreign exchange reserves stood at about $561 billion.
- It will roughly suffice India’s 9-10 months’ worth of import cover.

Vietnam recorded a 4.5% growth in exports from a year earlier to $29.18 billion amid sustained foreign demand.
Exports by the Philippines grew 20% in October.

Government has extended Interest Equalization Scheme on pre and post shipment rupee export credit upto 31-03-2024.
Assistance has been provided in form of schemes such as Trade Infrastructure for Export Scheme (TIES) and Market Access Initiatives (MAI) Scheme.
Implementation of Rebate of State and Central Levies and Taxes (RoSCTL) Scheme to promote labour oriented textile export.
Implementation of Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.
Government has launched Common Digital Platform for Certificate of Origin to facilitate trade and increase Free Trade Agreement (FTA) utilization by exporters.
New Champion Services Sectors have been identified for promoting and diversifying services exports.
Districts as Export Hubs has been launched by identifying products in each districts having export potential.
Special support for domestic industry through various banking and financial sector relief measures, especially for MSMEs.