Opinion Express View on goods data: Straws in trade wind

Data released by the Ministry of Commerce and Industry on Thursday showed that India’s merchandise exports grew by 3.1 per cent to $36.92 billion in January, from $35.8 billion last year. Goods exports have now registered a positive growth in three of the last four months. But for the financial year so far (April-January), total goods exports have touched $353.9 billion, down almost 5 per cent from $372.1 billion over the same period last year. Excluding oil exports, the decline is less, with non-oil exports down around 2.5 per cent this year.

The segment wise data shows that electronic goods continued to register a healthy performance, growing at 9.31 per cent in January. For the year so far, electronic exports are up a healthy 20.7 per cent, even as overall exports have fallen. Alongside, drugs and pharmaceutical exports are also up 8 per cent. However, major labour intensive segments such as gems and jewellery, textiles, leather and products have not fared well. Alongside, goods imports also grew at 3 per cent in January. However, excluding oil and gems and jewellery, imports were 2.3 per cent lower than last year. For the year so far (April-January), imports stood at $561 billion, down 6.7 per cent from $601 billion over the same period last year. The segment wise data shows that vegetable oil imports are down almost 29 per cent, fertiliser around 40 per cent and coal roughly 25 per cent. Imports of petroleum, crude and products, chemicals, pearls, precious and semi-precious stones and transport equipment are also significantly lower than last year. On the other hand, imports of gold, electronic goods and machinery, electrical and non-electrical goods are up.

Advertisement

There were expectations that the January trade data would reflect the disruptions caused due to the conflict in the Red Sea. The region accounts for 12 per cent of global trade, and around 80 per cent of India’s goods trade with Europe passes through it. Attacks by Houthi rebels on ships had forced vessels to take the longer route. As per a report in this paper, in January, India’s petroleum exports to Europe had been affected by these developments. However, based on the January trade data, a report by Nomura says that, “on a value basis, there doesn’t seem to be major disruption to trade from the Red Sea escalations.” It is possible that the effects will be visible in data still to come.