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India’s trade to improve amid easing global challenges: Economic Survey
- The adverse global trade environment of last year is expected to ease, boosting goods trade in 2024 and 2025, the Economic Survey said.
- Lower prices of imported commodities, including crude oil, helped narrow India’s trade deficit in 2023-24.
Amid geopolitical headwinds and sticky inflation, India’s exports remained strong in the financial year 2023-24, the Economic Survey asserted, adding that trading in goods is expected to improve this year and the next.
Though merchandise exports moderated owing to lower demand from major trading partners, India performed well in the export of services, lowering the country’s overall trade deficit from $121.6 billion in 2022-23 to $78.1 billion in 2023-24, as per the Economic Survey presented by Union finance minister Nirmala Sitharaman on Monday.
Despite persistent global challenges, India’s overall exports in 2023-24 grew 0.23% while overall imports declined 4.9% despite robust domestic demand.
“The adverse trade environment in 2023 is expected to ease somewhat this year and next, boosting goods trade in 2024 and 2025,” the Economic Survey said.
Factors such as lower prices of imported commodities, including crude oil, helped narrow India’s trade deficit in 2023-24, while moderation in merchandise imports and rising services exports improved India’s current account deficit, the survey said.
Among services exports, software, or IT services, boosted overall exports, while business services exports also have been rising as India emerges as a hub for global capability centres, the survey said.
A global rebound
As per the commerce ministry’s latest trade data, India’s merchandise trade deficit, which had widened to a seven-month high in May, narrowed slightly in June owing to fewer imports.
India’s merchandise trade deficit dropped to $20.98 billion in June from $23.78 billion in May, beating analysts’ expectations in a Reuters poll that had predicted a deficit of $21.5 billion.
India has set a target of $800 billion in exports, encompassing both goods and services, for fiscal year 2024-25.
Since the covid-19 pandemic, the global economy has been hurt by several factors such as the Russia-Ukraine and Israel-Palestine conflicts and the Red Sea crisis, leading to supply dislocations in several commodities and a considerable rise in inflation.
“World merchandise trade volume is expected to grow at 2.6% and 3.3% in 2024 and 2025, respectively, as demand for traded goods rebounds. The evidence of a rebound in global trade in 2025 is visible in the latest report released by United Nations Conference on Trade and Development (UNCTAD),” it said.
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Business NewsEconomyIndia’s trade to improve amid easing global challenges: Economic Survey
First Published:22 Jul 2024, 03:14 PM IST
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