India’s Exports Rise 3.12% in January Despite Global Economic Headwinds and Red Sea Crisis

Ira Singh
Khabar Khabaron Ki,16 Feb’24

India’s exports rose to a three-month high of 3.12 per cent to USD 36.92 billion in January(propped by sectors such as electronics, engineering goods and pharmaceuticals)despite global uncertainties including the Red Sea crisis , while the trade deficit narrowed to a nine-month low of USD 17.49 billion, according to the government data released on Thursday.

Imports increased 2.99 per cent to $54.41 billion in January 2024, with crude oil, electronics, coal and gold shipments contributing significantly to the rise. Trade deficit of $17.49 billion during the month was marginally higher than $17.03 billion in January 2023, stated official data.

“Despite red sea crisis, recession in the Western economies and falling commodity prices, we have been able to achieve growth, which is significant and not marginal. Our congratulations to the exporters (for their resilience),” said Commerce Secretary Sunil Barthwal.

“We are happy to say there are huge number of products we have been able to push for the first time. We are trying to create much larger basket for ourselves in terms of our exports,” he added.

According to the data,the estimated value during April-January 2023-24, exports declined 4.89 per cent to $353.92 billion while imports were lower by 6.71 per cent at $561.12 billion. Trade deficit in April-January 2023-24 narrowed to $207.20 billion compared to $229.37 billion in April-January 2022-23.

The Red Sea crisis is impacting exporters as it has pushed the transportation cost as they are taking a longer route — via Cape of God Hope, encircling Africa — to ship their goods to Europe and certain parts of Africa.

Exporters are apprehensive that if the Houthi attacks in the Red Sea continued, the situation could deteriorate. Exports had not gone down yet as exporters were forced to execute the old orders despite the high shipping costs, they said. “Much will depend on the new agreement to be signed with buyers during the new fiscal as exporters have been absorbing the burden of increased freight cost as per the old agreement,” according to exporters’ body FIEO(Federation of Indian Export Organisations).