India’s merchandise exports crawled back into positive terrain in December, rising 0.97% on-year to $38.45 billion after a 2.9% contraction in the previous month. On a sequential basis too, exports were up 4.1%1.
Merchandise exports were resilient in the face of slowing demand in major markets such as the United States and European Union, as well as supply chain bottlenecks2 and geopolitical tensions.
Core exports recorded an uptick of 5.4% on-year vis-à-vis a decline of 2.8% in November and were led by exports of electronic goods (14.4% vs 1.1%), engineering goods (10.2% vs -3.1%), drugs and pharmaceuticals (9.3% vs 7.3%), among others.
Cumulatively, India’s merchandise exports have declined 5.7% on-year in April-December this fiscal to $317.1 billion, compared with $336.3 billion a year ago.
While exports grew, India’s merchandise imports contracted 4.85% on-year to $58.25 billion from $61.22 billion in December 2022.
Oil and core imports fell 22.8% and 0.2% on-year, respectively, with Brent spot averaging $77.9/bbl in the month compared with $80.9/bbl in December 2022. Oil exports declined 17.6%.
Gold imports rose 156.5% on-year, largely due to a low-base effect, compared with 6.2% in November. However, imports of pearl, precious and semi-precious stones declined 11.7% on-year, but slower than the 56.7% on-year fall clocked the previous month. Silver imports declined 19.1% compared with a growth of 254.8% in November.
That said, imports of cotton (67.8% on-year), electronic goods (48.5%), artificial resins, plastic materials and others (10.4%) increased.
Decline in imports compared with rising exports narrowed the merchandise trade deficit to a three-month low of $19.8 billion in December from $20.6 billion in November and $23.1 billion in December 2022.
Cumulatively, in April-December this fiscal, merchandise imports have contracted 7.9% on-year to $505.14 billion, helping narrow the merchandise trade deficit to $188.02 billion from $212.35 billion.
India’s services exports continued to grow positively on-year, while imports continued a declining trend. As a result, the services trade balance remains robust at $14.4 billion in November, compared with $11.5 billion in November 2022.
