India Exim bank says merchandise exports to grow 6.3% in Q3

11/9/20231 min read

India Exim Bank reported on Thursday that merchandise exports from India are projected to increase by 6.3% year-on-year to $111.2 billion in the third quarter of FY24 (October-December 2023) due to an anticipated rise in global demand. Non-oil exports during this quarter are expected to experience a year-on-year growth of 7.7%, reaching $88.1 billion. It's important to consider these figures in light of the negative growth observed during the first two quarters, according to the bank.

The bank attributed the positive growth in India's exports to an improved GDP growth outlook and the expected global easing of monetary policy. However, the bank also noted that this outlook is subject to uncertainties, including the prospects for advanced economies, geopolitical shocks, and deepening geo-economic fragmentation.

Global trade has slowed down due to factors such as tightening monetary policies, diminishing fiscal support, persistent inflation, and geopolitical tensions impacting demand. In August, India's merchandise-export growth turned positive for the first time in the current financial year, recording a 3.86% year-on-year increase to $38.45 billion.

Official data released last month revealed a slight dip in Indian merchandise exports by 2.6% year-on-year to $34.47 billion in September, with imports experiencing a more substantial decline of 15% to $53.84 billion. Consequently, the merchandise trade deficit narrowed to $19.37 billion in September, marking its lowest level in five months.

India Exim Bank anticipates that India's total merchandise exports for the initial nine months of FY2024 (April-December 2023) will amount to $323 billion, with non-oil exports contributing $258 billion over the same period. The bank highlighted the consistent performance of India's merchandise exports, remaining above $100 billion for nine consecutive quarters since Q2 FY22, showcasing resilience amid a challenging global economic situation. The bank expects this positive growth trend in exports to continue in the last quarter of the financial year.