3rd in a row: Goods exports shrink 2.4%

India’s goods exports decreased for the third consecutive month, registering $36.43 billion in January and widening the trade deficit to $22.99 billion. Despite this decline, sectors like electronics, engineering goods, and pharmaceuticals showed growth. Imports, particularly gold, increased significantly, contributing to the rising trade deficit. India’s goods exports shrank for the third straight month to $36.43 billion in January, down 2.38% year-on-year, while merchandise trade deficit widened to $22.99 billion from $16.56 billion a year ago and $21.94 billion in December 2024. Despite the slide, India’s exports are doing comparatively better in both goods and services sectors amid economic uncertainties in the world, commerce secretary Sunil Barthwal said on Monday. Sectors like electronics, engineering goods, pharmaceuticals, rice and gems and jewelry registered healthy growth rates in January, he said. “Despite conflicts and tariff retaliation around the world, we are doing well,” Barthwal said, adding that India’s goods and services exports would cross $800 billion in 2024-25.

Sequentially, the exports were down 4.1% from $38.01 billion in December 2024. Goods imports in January 2025 were $59.42 billion as compared to $53.88 billion a year ago. In January, gold imports rose to $2.68 billion from $1.9 billion a year ago. Gold imports were much higher at $4.7 billion in December 2024. Barthwal said green shoots are visible in gems and jewelry exports as there were concerns over sanctions by the G7 countries. “It is a positive signal for us,” he said. In April-January FY25, the US was India’s top export destination with $68.47 billion outbound shipments, followed by the UAE and the Netherlands. “Not only exports, but imports are also rising from the US which means overall trade with the US is increasing,” Barthwal said.

China, Russia and the UAE were the top import sources:

On the weakening of rupee against the US dollar and the impact of exchange rate fluctuation, he said it depends on the imported inputs and demand elasticity, which has to be worked out for different products. FIEO president Ashwani Kumar attributed this drop in exports to the volatility in commodity and metal prices, as well as ongoing trade disruptions, such as the tariff war and currency fluctuations. The surge in imports, coupled with the widening trade deficit, has raised alarms about potential impacts on domestic industries and the overall trade balance. “The depreciation (in rupee) has contributed to higher import bills, especially since India meets 90% of its oil demand from overseas,” Kumar said.

Source : https://economictimes.indiatimes.com/news/economy/foreign-trade/3rd-in-a-row-goods-exports-shrink-2-4/articleshow/118338428.cms