Exports drop 3.5% in September, imports slide below $60 billion for the first time in seven months

India’s goods exports dropped 3.5% in September to $32.62 billion, while imports slid below $60 billion for the first time in seven months to $59.35 billion, 5.44% higher than a year ago. The trade deficit stood at $26.73 billion for the month.

This is the first contraction in exports since February 2021 and the trade deficit is almost 19% higher than a year ago. While highlighting that the trade deficit in September was “an improvement over the trade deficit of $28.68 Billion in August 2022”, the Ministry explained that India’s “export in certain sectors has seen a decline on account of slowdown in some developed economies and a consequential slowdown in demands” while “certain measures to contain domestic inflation and domestic food security concerns have also impacted exports”.

Non-petroleum, and non-gems and jewellery exports contracted 9.78% in September to $22.9 billion, from $25.38 billion a year ago, while imports of such products grew 16.78% to hit $36.5 billion from $31.26 billion a year ago.

Six of India’s top ten export products, including engineering goods, chemicals, drugs and pharmaceuticals, readymade garments, cotton yarn and handlooms, and rice, recorded a contraction this September compared to last year.

The sharpest decline in exports was recorded in cotton yarn and handloom products, which shrank 41.4% from $1.31 billion a year ago to just $767.5 million this September. Electronics goods exports, on the contrary, jumped 64% to hit $1.9 billion, while gems and jewellery shipments abroad increased 12.6% in value terms.

Engineering goods exports, the mainstay of India’s exports prowess in recent times, dropped 17% to $7.81 billion from $9.41 billion in September 2021, while readymade garments of all textiles, a major employment generator, dropped 21.55% to little over $1 billion a year ago.

“Value of non-petroleum exports in September 2022 was $26.54 billion, registering a negative growth of only 7.25% over non-petroleum exports of $28.62 billion in September 2021,” the Ministry said.

Petroleum exports rose 17% to cross $6 billion, but imports of petroleum, crude and related products dropped 7% in September, as per early estimates released by the Commerce and Industry Ministry late Monday night.

Restrictions on exports of broken rice and a 20% export tax on other varieties of the critical cereal, imposed during September, led to a nearly 6% drop in its exports during the month, while chemicals (down 1.7%) and pharma (0.13% lower). reported milder declines.

Coal imports jumped nearly 57% from $2.18 billion a year ago to cross $3.43 billion in September, even as gold imports slid 28.5% to a little over $3.6 billion compared to $5.11 billion last September.

Among the other major imports, vegetable oils, chemicals, electronics, and pearls — including semi-precious and precious stones — recorded marginal declines year on year during September. However, transport equipment imports jumped 63% to $2.87 billion, while iron and steel imports were up 35% and machinery imports rose 12% to nearly $3.6 billion.

In the first half of 2022-23, exports of non-petroleum and non-gems and jewellery products stand at $158.68 billion, an increase of 5.53% over the last financial year, the Ministry pointed out, while total goods exports are up 15.54% at $229.05 billion.