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Among top 10 import origins, only two – Russia and South Korea – see growth
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A slowdown in demand for Indian goods from five of its top 10 markets —the United States (US), the United Arab Emirates (UAE), Bangladesh, Germany and Hong Kong — resulted in a sharp contraction in exports, at nearly 14 per cent, in March, the latest data released by the commerce and industry ministry showed. This came against the backdrop of geopolitical tensions and fears of recession in several developed economies.
India’s top 10 export destinations accounted for 52 per cent of the value of goods shipped in March.
Outbound shipments to the US —India’s largest export market for a decade — dropped 5.4 per cent year-on-year to $7.32 billion in March. The second-largest export market, the UAE, which also signed a free-trade agreement with India last year, witnessed a 12.6 per cent decline to $2.70 billion. Exports to Bangladesh, Germany, and Hong Kong fell 28 per cent, 24.3 per cent, and 28.4 per cent, respectively, according to the data.
Of the top 10 markets, the countries that witnessed growth were the Netherlands (42.2 per cent), Saudi Arabia (18.6 per cent), the UK (17.5 per cent), China (15.86), and Singapore (10.9 per cent). The growth in the value of exports to China could be attributed to the reopening of its economy after months of slowdown in economic activity due to its zero-Covid policy.
The commerce and industry ministry data showed on Thursday that India’s merchandise exports fell 13.9 per cent year-on-year to $38.38 billion in March, as global headwinds such as geopolitical tensions, high inflation, and monetary policy tightening continued to affect external demand. This was the sharpest contraction since May 2020.
On a cumulative basis, three of the top 10 export partners – China, Bangladesh, and Hong Kong – saw a contraction of 27.9 per cent, 27.7 per cent, and 9.9 per cent respectively in the financial year 2022-23.
During FY23, exports grew only 6 per cent YoY to $447.46 billion, as compared to a robust 44 per cent jump in FY22.
The US and the UAE continued to remain India’s top two export destinations in FY23. The Netherlands grew at the fastest pace to become the third-largest export market, replacing China. This was mainly due to the export of refined petroleum products to the European nation.
Meanwhile, inbound shipments worth $58.11 billion entered India in March, down 7.89 per cent YoY. On a cumulative basis, growth in imports was 16.5 per cent at $714 billion in FY23.
Of India’s top 10 import origins, only two nations – Russia and South Korea – saw growth, at 258.6 per cent and 23.1 per cent respectively in March. The remaining eight nations saw contraction; these included China (-14.8 per cent), the UAE (-5.8 per cent), the US (-12.2 per cent), Saudi Arabia (-27.4 per cent), Iraq (-36.3), Indonesia (-5 per cent), Singapore (-14.3 per cent), and Australia (-3.2 per cent). These 10 countries accounted for 60 per cent of the value of goods imported in March.
Interestingly, Russia overtook Saudi Arabia and Iraq to become India’s second-largest import partner last month, thanks to crude oil imports from the nation.
China remained the top import nation for India, although the country’s share of imports from the neighbouring nation fell to 13.79 per cent in FY23 from 15.43 in FY22. On the other hand, during March, imports from China contracted nearly 15 per cent to $7.79 billion. Government officials said one of the reasons was that China’s import share in electronic goods had declined.