India’s exports grew about 15.5 percent in April-September 2022 to $229.05 billion while imports expanded 37.9 percent to $378.53 billion, at a time when global growth was slowing due to policy interventions to cool the rapid rise in inflation.
As growth slowed, India’s exports contracted 3.5 percent in September to $32.6 billion, provisional trade data show. Imports grew 5.4 percent to $59.3 billion, thanks to the rising domestic demand for petroleum products, coal and electronic goods and components.
The change in the commodity cycle, the war in Ukraine and policy interventions of the Union government, such as higher export and import tariffs on some commodities and lower or nil tariffs on some others, had a direct bearing on India’s external trade.
Here are five broad trends that emerged from the disaggregated commodity and country-level data published by the Commerce Ministry for the April-August period.
While the provisional data is for April-September, the disaggregated commodity and country-level data is for April-August. Since disaggregated data is published with a lag, the April-September data will be available only by the end of October. The provisional data is revised mid-month.
The trending five
- Fossil fuel imports doubled, in value terms, as international prices of petroleum crude and coal climbed higher on the back of increased demand and disruptions caused by sanctions on Russia. India imported fossil fuels worth $126.2 billion in the April-August period.Its share in the import basket rose sharply to about 40 percent in the period from about 29 percent a year ago. Coal and coke imports rose 174 percent as the government made the blending of imported coal mandatory for power plants and non-power plants stepped up buying from overseas to tide over the fuel shortage. Currently, India’s top three imports, in value terms, are crude petroleum, coal and petroleum products, with gold pushed down to the fourth place.
- Gold import through official channels contracted about 12.6 percent to $16.4 billion after the government sharply raised tariffs to discourage its inflows. Its share in the import basket contracted from more than 8 percent to just a little more than 5 percent.
This contraction in gold imports led to a 35 percent fall in the total value of India’s imports from Switzerland. Gold is the primary trade item between the two countries. About a third of gold imports originated in Switzerland in the first five months of the current financial year, down from about 50 percent in the corresponding period last year.
The contraction in gold imports saw Switzerland tumble 10 places to the 14th position as a source of imports.
- China continues to be the largest source of imports even though COVID-related lockdowns and power crises slowed manufacturing and continued to disrupt supply chains. And, so imports grew at a slower pace. India continued to import all kinds of electronic goods, including mobile phones, computers and consumer durables, and machinery and chemicals.
Exports to China, however, contracted by almost 36 percent as growth slowed in the second-largest economy.
In comparison, trade with the US was relatively robust. Imports from the US grew more rapidly than from China. Exports to the US also rose, but at a slower pace than last year’s. As a result, the US widened its lead over China as India’s largest trading partner.
- Russia joined the ranks of the top 10 trading partners as India bought unprecedented volumes of discounted petroleum crude from the country, on which sanctions have been imposed by most of the developed world for invading Ukraine. Imports from Russia jumped 442 percent in April-August to $17.2 billion, catapulting the nation 15 places to the sixth position as a source of merchandise goods.
These imports included petroleum crude worth $11.4 billion, petroleum products worth $1.2 billion and coal worth $1.8 billion. About 14.7 percent of India’s crude imports, by value, during April-August originated in Russia compared to 2.2 percent a year ago. Fertiliser imports from the nation also grew.
Exports to Russia, however, were hit by sanctions. The value of trade with Russia was similar to trade with Iraq and Indonesia.
- The rise in coal imports benefited trade with Indonesia and Australia. The value of coal imports from Indonesia jumped 287 percent and from Australia 107 percent in April-August 2022. Thermal coal and coking coal comprised about 81 percent of imports from Australia and 62 percent from Indonesia. Coal imports from Australia also benefited from the interim free trade agreement, also known as the Australia-India Economic Cooperation and Trade Agreement signed on April 2. It allows the import of coal at zero duty.
The agreement also helped the continent-country to muscle its way into the top 10 sources of imports.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
