India FY23 exports defy global turmoil to hit record high

In a year of uncertainties worldwide, India exported a record $447 billion worth of goods in FY23, up about 6% from the previous year, commerce ministry data showed.

- Ravi Dutta Mishra

However, goods exports in March 2023 slipped to $38.38 billion compared to $44.57 billion during the previous year, registering a 13% fall. At the same time, goods imports rose over 16% to touch $714 billion, widening the goods trade deficit to highest ever mark of $267 billion against the previous year’s $191 billion.

Overall trade deficit— including goods and services —touched a record $122 billion during the year, as exports that grew 13.84% to a record $770 billion were outmatched by imports that grew at a faster pace of 17.38% to a record $892 billion. Imports from Russia jumped 370% during the year, as India shopped around for cheaper crude oil. The rise in deficit also weakened the rupee and eroded forex reserves. India’s foreign exchange reserves declined by around $70 billion in 2022, amid rising inflation and interest rates. From $632.74 billion in January, the reserves fell to $562.851 billion by the end of 2022.

Ajay Srivastava, co-founder, Global Trade Research Initiative, said that energy-related imports, at $259.3 billion for FY23, use up foreign exchange the most. “They contributed 36.3% of India’s merchandise import bill. But more worrisome is the high rate of growth in imports. Energy imports grew 34% in FY23 over the previous year. In contrast, imports of remaining merchandise goods grew at just 8.4%," Srivastava added.

Experts said goods exports may come under pressure in the current financial year as economic activity slows and demand cools across the globe.