India’s Goods Exports Touches New Height | 17 Apr 2024

Source: PIB

Why in News?

India's merchandise exports reached a peak of USD 41.68 billion in March 2024 compared to the FY 2022-23.

What does the Current Export Data Reveal?

• About:
  • India’s goods exports reached USD 41.68 billion in March 2024 compared to the FY 2022-23, despite a 0.67% decline from last year’s tally,
  • Imports, on the other hand, dropped by 6% to USD 57.3 billion during the same period.
  • The goods trade deficit contracted to USD 15.6 billion, the lowest in 11 months.
• Key Factors:
  • Gold Imports Decline: Gold imports fell sharply by 53.6% in March to USD 1.53 billion.
  • Non-Oil, Non-Gold Imports: The drop in non-petroleum, non-gold imports contributed to the overall decline.
  • Silver Imports Surge: Interestingly, silver imports jumped to USD 816.6 million.
• Impact on Full-Year Figures (2023-24):
  • While goods exports averaged USD 35.4 billion in the first ten months, the last two months’ spike lifted the full-year export figure to USD 437.1 billion.
  • This performance is 3.1% below the record USD 451.1 billion achieved in the previous year.
• FY 2023-24 Projections:
  • Despite persistent global challenges like the Ukraine war, and the West Asian crisis, overall exports are estimated to surpass last year’s record.
    • India’s overall exports (merchandise + services) are estimated to reach USD 776.68 billion.
    • This represents a positive growth of 0.04% over the previous fiscal year (FY 2022-23).
    • Despite global challenges, this figure slightly edges out the USD 776.40 billion recorded in FY 2022-23.

• Merchandise Export Drivers: Key contributors to merchandise export growth include:
  • Electronic Goods: Exports increased by 23.64% to USD 29.12 billion.
  • Drugs & Pharmaceuticals: Exports rose by 9.67% to USD 27.85 billion.
  • Engineering Goods: Exports grew by 2.13% to USD 109.32 billion.
• Agricultural Commodities Show Positive Growth:
  • Exports of agricultural commodities, such as tobacco, fruits, vegetables, meat, dairy products, spices, and oil seeds, exhibited positive growth in FY 2023-24.
• Trade Deficit Improvement:
  • The overall trade deficit is estimated to significantly improve by 35.77% to USD 78.12 billion in FY 2023-24.
  • Merchandise trade deficit improved by 9.33% to USD 240.17 billion compared to FY 2022-23.
• Current Account Balance Outlook:
  • The easing of the goods trade deficit in March is expected to augur well for the current account balance in the final quarter of FY 2023-24.

What Should be the Strategy to Further Enhance India’s Exports?

• Cost Optimisation:
  • Land, Power, and Capital Costs: The government must urgently address cost-related challenges associated with land acquisition, power tariffs, and capital availability.
  • Scale and Efficiency: Encouraging economies of scale can significantly reduce cost disabilities for businesses.
• Enhancing Competitiveness:
  • Infrastructure and Logistics: Improving transportation networks, ports, and warehousing facilities will enhance supply chain efficiency.
  • Labour Flexibility: Streamlining labour laws and ensuring flexibility can make Indian companies more competitive.
  • MSME Support: Strengthening Micro, Small, and Medium Enterprises (MSMEs) will contribute to overall competitiveness.
• Market Access via Trade Treaties:
  • India should actively negotiate and sign trade agreements with key trading partners to facilitate market access for its exports.
  • Bilateral and multilateral treaties can open up new avenues for Indian products globally.
• Technology and Quality Focus:
  • Investing in research and development (R&D) and adopting advanced technologies will enhance product quality.
  • Quality certifications and adherence to international standards are crucial for gaining consumer trust.
• Promoting Brand India:
  • The government and industry bodies should collaboratively promote “Brand India” on the global stage.
  • Highlighting India’s rich cultural heritage, skilled workforce, and innovative capabilities will attract international buyers.
• China Plus One Strategy:
  • Encouraging multinational companies to diversify their manufacturing base away from China is essential.
  • India can position itself as an attractive alternative for investment and production.
• By implementing these strategies, India can not only sustain its export growth but also surpass previous records, contributing to economic prosperity and global trade dynamics