The decline in India’s merchandise exports mirrors the global trend of a 5 per cent decline (as per UNCTAD’s Global Trade Update) and aligns with China’s 5.2 per cent drop in merchandise exports during January-November 2023, it added.
The World Trade Organization (WTO) has forecast that the global merchandise trade volume would grow only by 0.8 per cent in 2023.
In 2023, sectors which are expected to register growth include, aviation turbine fuels, motor gasoline, smartphones, basmati rice, motor car-medium size, turbo-jets, and auto components.
Smartphone exports are expected to jump by about 93 per cent to USD 14 billion during the current calendar year as against USD 7.2 billion in 2022.
“In 2023, smartphone will emerge as a major success story for India. This significant increase will contribute to the overall rise in India’s electronics exports, which reached USD 26.8 billion, marking a growth of 26.2 per cent,” it said, adding imports of electronic goods will grow by over 8 per cent to USD 81 billion. Imports of finished electronic products like computers, laptops, and other hardware may decline by over 10 per cent this year. Exports of traditional sectors such as engineering goods, petroleum products, chemicals, gems and jewellery, readymade garments of all textiles, cotton yarn/fabrics/made-ups, handloom products, plastic, marine products, leather, carpets, handicraft, and tea are expected to fall in 2023.
“The decline can be attributed to weak global demand and India gradually losing its competitiveness in labour intensive sectors,” GTRI Co-Founder Ajay Srivastava said adding exports of petroleum products may also fall by over 9 per cent to USD 86 billion.
“Conversely, imports of petroleum crude are projected to rise to USD 139.8 billion in 2023, marking a 14.1 per cent increase over 2022,” he said.
The report said that India’s merchandise exports may decline by 5.3 per cent to USD 429.4 billion in 2023 from USD 453.3 billion in 2022. Similarly, the imports could dip by 7 per cent to USD 670 billion this year as against USD 720.2 billion in 2022.
Services exports, on the other hand, are expected to rise by 10.5 per cent to USD 333.5 billion in 2023 as against USD 302 billion in 2022. Imports however may record a flat growth at USD 176.4 billion in 2023.
“Exports of goods and services are expected to slightly increase to USD 763 billion in 2023 from USD 755.3 billion in 2022. Imports, however, may dip by 5.7 per cent to USD 845.8 billion in 2023 from USD 896.6 billion in 2022. Consequently, the total value of exports and imports together could be reduced by 2.6 per cent, from USD 1,651.9 billion in 2022 to USD 1,608.8 billion in 2023,” the report said.
It added that gold imports may increase by over 18 per cent to USD 43.33 billion this year.
“Interestingly, this decrease in exports occurred despite a considerable depreciation in the Indian Rupee (INR) against the US Dollar (USD). Over the span of one year, the average INR/USD exchange rate had depreciated from 77.5 in June 2022 to 82.1 in June 2023,” Srivastava said.
He added that normally, a weaker domestic currency can boost exports by making a country’s products more competitive in the global market.
“However, in India’s case, the depreciation of the INR did not translate into increased export volumes,” he said.
