India's 2023/24 merchandise exports fall for first time in four years

Salesman stands inside a retail store with a sign advertising a sale in New Delhi

By Nikunj Ohri

NEW DELHI (Reuters) -India's merchandise exports fell for the first time in four years in 2023/24, official data showed on Monday, hit by factors including geopolitical tensions and export curbs on foodstuffs such as rice to curb domestic inflation.

India's goods exports in the fiscal year to March 31 fell to $437 billion, compared with $451 billion in the previous year - the first yearly decline since 2020/21 when trade was affected by the COVID-19 pandemic.

Rice exports fell 6.5% in the fiscal year ended March 31 to $10 billion, while other cereals dropped 57% to $518 million. Exports of ready-made garments shrank 10% to $14.5 billion and exports of petroleum products fell 13.7% to $84.1 billion.

The country's imports also fell about 5% year-on-year to $677 billion, due to lower shipments of fertilisers, cotton and vegetable oil.

India's overall deficit in merchandise trade stood at $240 billion as against a deficit of $265 billion a year ago.

In the month of March, India's merchandise trade deficit fell to $15.6 billion, much lower than $18.55 billion economists were expecting and the lowest level in 11 months, due to low imports particularly of gold.

Gold imports more than halved to $1.5 billion compared with the same period last year.

"This is expected to augur well for the current account number," said Aditi Nayar, economist at ICRA, who added that the current account may witness a small surplus of $1 billion-$2 billion in the January-March quarter.

India's merchandise exports stood at $41.68 billion in March, while imports were $57.28 billion, the data showed. By comparison, in March 2023 merchandise exports were $41.96 billion, while imports were $60.92 billion.

Services exports in March were $28.54 billion, while imports were $15.84 billion, compared with $30.44 billion and $16.96 billion respectively in the same month last year.

(Reporting by Nikunj Ohri; Editing by Mark Potter and David Holmes)