The impact of a reversal in global trade trends is visible in India as well, as demand recovers, especially across New Delhi's major exporting partners, and inflationary pressures slow down, the finance ministry said on August 22.
India’s merchandise exports grew 4.1 percent in the first four months of FY25, the ministry said in its monthly economic review for July.
Engineering goods, petroleum products, electronic goods, drugs & pharmaceuticals and organic & inorganic chemicals accounted for around 65 percent of outbound shipments in the first four months of FY25.
As far as the external sector is concerned, there is evidence of trend reversal, with merchandise exports and imports surpassing their previous year’s level.
Recovery in demand across India’s major exporting nations has given a boost to exports, while a strong domestic demand has encouraged imports, the July review said.
The country’s merchandise trade deficit widened to $23.5 billion in July from $21 billion in the previous month, data released by the ministry of commerce on August 14 showed.
The country’s merchandise exports declined 1.5 percent, while imports rose by 7.5 percent in July.
"We will cross last year's numbers. We are doing everything to push our exports in different territories," commerce secretary Sunil Barthwal said on August 14.
Global trade trends turned positive in Q1 of 2024, with trade in goods increasing by around 1 percent quarter over quarter, while services grew at approximately 1.5 percent, the United Nations Conference on Trade and Development's (UNCTAD) said in its latest update.
This upward trend has been fuelled by positive trade dynamics for the US and developing countries, particularly the strong export performance of the largest Asian developing economies.
The potential for interest rate cuts in the US later in the year and consequently a weaker US dollar could give global trade a significant boost. However, the future of global trade in 2024 is still at risk due to ongoing geopolitical tensions, rising costs of shipping, and the emergence of new industrial policies, UNCTAD said.
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