export challenge

India’s merchandise exports fell 6.6% to $32.91 billion in January from a year earlier, according to government data released on Wednesday. This is the third decline in four months. Imports also fell 3.6% year-on-year to $50.66 billion last month. Encouragingly, our trade deficit in January was $17.75 billion, well below the peak of $30 billion last July. However, with exports down, it seems that demand is starting to slow down due to the global economic slowdown. As the West moves closer to a possible recession, our export prospects may weaken further. Moreover, as China leaves behind its strict lockdown to get back into business, the competitive heat in global markets could intensify. Still, the export figure of over $30 billion isn’t that bad. For the April-January period, Indian shipments grew by 8.5% to $369.25 billion. If our monthly exports maintain their current pace, the full year tally could cross the record level of close to $420 billion in 2021-22. However, as a proportion of GDP, our export trajectory over the past decade has been dismal. The question is whether India’s new industrial policy thrust and supply-chain attractiveness can boost the country’s performance.