India fiscal year 2022-2023 exports grow 6.0%; exports to stay weak

SINGAPORE (ICIS)–India’s merchandise exports in the fiscal year ending March 2023 increased 6.0% year on year from the previous fiscal year, but were eclipsed by the 16.5% rise in imports due to weakening global demand and strong crude prices.

Exports in March shrank for the fourth consecutive month year on year and will likely stay depressed in the coming months amid the global economic slowdown.

In the fiscal year 2022-2023, India’s shipments abroad declined for a total of five months, with March’s contraction the second steepest at about 14% year on year, according to preliminary data from India’s Ministry of Commerce.

Amid external headwinds, along with high interest rates and inflation which dampen domestic consumption, India – a giant emerging economy in Asia – is projected to post a slower GDP growth in the current fiscal year ending March 2024 compared with a projected 6.8% in the previous year.

The International Monetary Fund (IMF) trimmed its GDP growth forecast for India to 5.9%, lower than the World Bank’s 6.3% and the Asian Development Bank’s 6.4%.

On 6 April, India’s central bank paused its monetary policy tightening cycle, maintaining its benchmark interest rate at 6.5%, and adjusted up its GDP growth projection for the fiscal year 2023-2024 to 6.5% from 6.4%.

The country’s annualized retail inflation eased to 5.4% in March from 6.4% in the previous month, a 15-month low and now below the high end of the central bank’s targeted range of 2.0-6.0%.

Inflation in the current fiscal year is projected to average 5.2%, according to the Reserve Bank of India.

Focus article by Pearl Bantillo

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