Red Sea crisis hits Indian exports substantially

Even as the National Statistics Office (NSO) data on GDP growth for the third quarter of financial year 2023-24 (3FY24) underlines moderation in both exports and imports, a survey of India's trade with Mediterranean Sea and Red Sea bordering countries, by the Federation of Indian Export Organisations (FIEO) confirms that India's exports to these countries worth USD 64 billion are directly affected.

- NIVEDITA MUKHER

"Export growth moderated to 3.4 percent in the third quarter from 5.3 percent in the previous one," observes Dharmakirti Joshi, Chief Economist, CRISIL, on the NSO data relating to exports. However, as Joshi points out, import growth fell to 8.3 percent following 11.9 percent growth in the previous quarter. "Net exports (exports minus imports) continued to drag GDP growth, but to a lesser extent in the third quarter versus the second," Joshi adds.

While merchandise trade braved choppy Red Sea waters in January, Nomura Ratings data of 15 February, 2024 did show an improvement in merchandise export and import growth and record-high services trade surplus. However, the pan India FIEO survey covering more than 170 exporters across the country shows the widespread impact on a diverse range of products in key export destinations.