In August, India’s merchandise exports experienced their seventh consecutive monthly decline, decreasing by 6.9 percent year-on-year to $34.48 billion, according to data released by the commerce department. This contraction was attributed to weakened external demand. However, the government remains optimistic, asserting that exports are beginning to stabilize, with signs of recovery becoming evident.
Conversely, the merchandise trade deficit, representing the gap between exports and imports, widened to a 10-month high of $24.16 billion in August. This increase can be attributed to higher crude oil prices and strong domestic demand, which resulted in an almost 11 percent surge in imports compared to the previous month.
Imports in August amounted to $58.64 billion, marking a 5.2 percent year-on-year decline. Although both exports and imports have been on a downward trend since the beginning of 2023, the rate of contraction has moderated since July, as indicated by the data.
Commerce Secretary Sunil Barthwal pointed out that the high base effect from the previous year contributed to the decline in exports. He also noted that while falling commodity prices affected the value of exports, their volume remained positive.
During a media briefing, Barthwal expressed optimism, stating, “Pessimism is turning into optimism now as greenshoots are clearly visible. The industry has reported improved export orders and expressed optimism regarding export order books. This month (August), at least last month’s (July’s) story is repeating, indicating an improvement in the global export scenario.”
