India’s goods exports have demonstrated resilience, growing by 1.07% in April 2024 to nearly $35 billion, despite facing global economic uncertainties and geopolitical tensions. This information comes from the latest figures released by the Union Commerce Ministry. However, the country also saw a significant rise in imports, which surged by 10.25% to $54.1 billion, mainly driven by an increase in gold purchases.
Due to the higher import levels, the merchandise trade deficit for April widened by 32.3% compared to the same month last year, reaching $19.1 billion. The spike in gold imports was particularly notable, more than tripling to $3.11 billion from $1.01 billion in April of the previous year. In March 2024, gold imports were recorded at $1.53 billion.
Commerce Secretary Sunil Barthwal expressed optimism, suggesting that the rise in merchandise exports at the start of the 2024-25 financial year bodes well for the coming months. Key sectors that contributed to the export growth include electronics, pharmaceuticals, chemicals, and petroleum products.
The Commerce Ministry has updated its estimate for total exports for the 2023-24 fiscal year to $778.2 billion, slightly up from the $776.7 billion estimated the previous month. This represents a 0.42% increase over the record $776.4 billion in exports for the 2022-23 fiscal year, with services exports expected to grow robustly.
Ashwani Kumar, President of the Federation of Indian Export Organisations (FIEO), highlighted that achieving over 1% growth in the new financial year amid challenging conditions reflects the resilience of India’s export sector.
Kumar noted that the ongoing Russia-Ukraine conflict and other geopolitical tensions, such as the Red Sea crisis and the Israel-Hamas conflict, have complicated the international trade environment for Indian exporters. He also mentioned that the tariff war between the US and China might present opportunities for India’s export sector.
Aditi Nayar, Chief Economist at ICRA, pointed out that nearly half of the increase in the merchandise trade deficit between April 2023 and April 2024 was due to the surge in gold imports amid rising global prices. Nayar projected that the current account deficit for the fiscal year 2025 is likely to be around a modest 1.2% of GDP.
Despite global uncertainties, India’s goods exports have shown growth, supported by key sectors and optimistic future prospects. The rise in imports, particularly gold, has widened the trade deficit, but the overall economic outlook remains cautiously positive.
