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In this episode of the State of the Economy podcast, businessline’s Amiti Sen talks about the performance of India’s goods exports as we move into the new fiscal year, with Ajay Sahai, Director General, Federation of Indian Export Organisations.
After a 3 per cent decline in goods exports in 2022-23, totalling $437 billion, the new fiscal year has started positively with two consecutive months of growth. In April 2024, exports grew by around 1 per cent year-on-year, and in May 2024, the growth rate was a robust 9.1 per cent, with exports reaching $38.13 billion. Imports also rose in May, increasing by 7.7 per cent to $61.91 billion. However, this led to the trade deficit widening to $23.78 billion, a seven-month high.
Sahai starts the conversation by confirming that the May numbers were indeed expected, predicting around 9 per cent growth. He attributes this to the world adapting to issues relating to the Russia-Ukraine war and inflation pressures, which are softening. He believes that the global trade outlook for 2024 is encouraging, with inflation rates and interest rates being managed effectively by major economies.
He mentions several factors driving this growth, including increased global demand and the China Plus One policy, which is pushing global companies to diversify their sourcing. The US tariffs in China are also making Indian products more attractive.
Furthermore, Sahai highlights the diversification in export markets, noting significant growth in exports to the Netherlands, UK, and Malaysia. He also addresses concerns about the widening trade deficit, attributing it to high import bases and increased oil prices.
Host: Amiti Sen; Producer: Amitha Rajkumar
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About the State of the Economy podcast
India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups
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