ROBUST ORDERS, FTAS TO DRIVE EXPORTS

Improved demand coming in from the European Union, UK, West Asia and the US, which has given an order boost to exporters with over 10 per cent bookings, is widely expected to push exports into higher trajectory into the new fiscal FY25 even as a stubborn upside in trade deficit -- accentuated by 7.7 per cent, month-on-month growth in imports during May 2024 at US$ 61.91 billion which pushed up the trade deficit for the month to US$ 23.78 billion - continues to worry trade experts, exporters and government stakeholders.

India's merchandise exports in May 2024 registered 9.10 per cent year-on-year growth at USD 38.13 billion as compared to USD 34.95 billion in May 2023, majorly driven by petroleum products, engineering goods, electronic goods, drugs and pharmaceuticals, readymade garments (RMG) of all textiles and plastic and linoleum. This is the second month in a row in the new financial year 2024-25 April, that merchandise export figures have posted an increase with outbound shipments in April growing over 1 per cent compared to USD 34.62 billion of April 2023. India's total exports, combining merchandise and services, also grew estimatedly at USD 68.29 billion in May 2024, registering 10.25 per cent jump vis-à-vis May 2023.

On the cumulative front too, during the first two months of the new fiscal --April-May 2024 - merchandise exports were USD 73.12 billion as compared to USD 69.57 billion during April-May 2023. In AprilMay 2024, India's total exports grew at USD 133.61 billion registering a positive growth of 9.21 per cent. Easwaran, Partner and Supply Chain Leader, Deloitte India shares the optimism on a positive outlook for global trade, which combined with India's focus on FTAs and PLIS, is likely to see a boost in India's merchandise exports.

Importantly, as President of FIEO Ashwani Kumar points out, all this comes amidst an ongoing RussiaUkraine war coupled with various major geo-political tensions including the Red Sea crisis and Israel-Hamas conflict which have made the international trade scenario much tougher for the Indian exporters. "The goods exports of USD 38.13 billion with an impressive growth of 9 per cent compared to May 2023 is a good sign which shows the resilience of the exports." says Kumar. "Trade is expected to broadly benefit from a positive global growth backdrop, even as service trade receipts flatline," observes Radhika Rao, Executive Director and Senior Economist, DBS Bank.