In February, India saw a notable surge in merchandise exports, marking the fastest growth in 20 months at almost 12%, despite challenges such as the Red Sea crisis and declining commodity prices. Government data from the Commerce Department revealed a corresponding increase of 12.2% in merchandise imports, reaching $60.1 billion, resulting in a trade deficit of $18.7 billion for the month.
Commenting on the February 2024 trade figures, Ashwani Kumar, President of the Federation of Indian Export Organisations (FIEO), highlighted that such robust export growth hadn’t been seen since March 2023 when it reached US$ 41.96 billion. He commended the resilience of the exporting sector amidst adversities like the Red Sea crisis, global monetary tightening, and falling commodity prices, noting the continuous dedication of exporters despite challenges, notably since the Russia-Ukraine conflict. Kumar emphasised the exporters’ consistent performance, which not only drives export growth but also contributes to the overall economic momentum.
Attributing the trade deficit increase in February 2024 to a four-month high in imports, Kumar underscored the positive impact on employment generation, particularly in labour-intensive sectors like Engineering Goods, Electronic Goods, Organic & Inorganic Chemicals, Drugs & Pharmaceuticals, and Petroleum Products. He noted a slight dip in exports during April-February, touching US$ 395 billion, while emphasising a reduction in import dependence to US$ 225.20 billion, down from $245.94 billion in the first 11 months of 2022-23.
FIEO reiterated concerns over recent tensions in West Asia, especially regarding consignments passing through the Red Sea, leading to substantially higher freight rates and additional surcharges, further burdening the exporting community.
