India’s electronics, pharma, engineering goods exports beat global trade slowdown during FY24

  • With WTO expecting global goods and merchandise trade to recover gradually during 2024, sectors like electronic goods, engineering goods, drugs & pharmaceuticals and iron ore, among others, which reported growth amid the downturn, are expected to drive exports during FY25.

Rhik Kundu
Updated21 May 2024
According to commerce ministry data, the export of engineering goods, which had about a 25% share in the export basket, grew by about 2.14% annually in value terms during FY24.
According to commerce ministry data, the export of engineering goods, which had about a 25% share in the export basket, grew by about 2.14% annually in value terms during FY24.

New Delhi: Only a few Indian sectors—engineering goods, electronic goods, and drugs & pharmaceuticals products—have seen a rise in their annual export value during FY24, a year that saw high interest rates globally curb demand and geo-political conflicts increase energy prices.

Now, with the World Trade Organization (WTO) expecting global goods and merchandise trade to recover gradually, these sectors, plus iron ore, are expected to drive exports during FY25 too.

Sectoral rise

According to commerce ministry data, the export of engineering goods, which had about a 25% share in the export basket, grew by about 2.14% annually in value terms during FY24.

Also read | India's Q4 GDP growth expected to moderate to 6.7%, says rating agency ICRA

During the same period, the export of petroleum products and gems & jewellery, which have 18.6% and 7.6% share in the export basket, declined by 11.8% and 13.83%, respectively. These sectors have the second and third largest share in the export basket.

The export of organic and inorganic chemicals, constituting about 7% of the export basket, fell by 2.78% in value terms, during FY24.

Electronic goods and drugs & pharmaceuticals, together contributing about 14% share in India's export basket, saw an annual growth of 23.5% and 9.73%, respectively, during FY23.

Fall in trade

During FY24, India's merchandise exports stood at $437.06 billion, down from $451.07 billion during the previous fiscal. Goods imports fell to $677.24 billion from $715.97 billion recorded during the same period.

Also read |  No merger but PSB privatization still on cards

India's trade performance in 2024 was influenced by global events: Houthi attacks on ships on the Red Sea led to higher freight and disrupted supply chains; expensive crude oil on account of the continuing Russia-Ukraine war; US-China trade tensions leading to more expensive value chains; and the EU's proposed Carbon Tax and Forest regulations, think tank Global Trade Research Initiative (GTRI) said in a report.

Health ahead

"Going forward these sectors like electronic goods, mobile assembling, drugs and pharmaceuticals are expected to continue to do well," said Biswajit Dhar, a professor at the Centre for Economic Studies and Planning at Delhi’s Jawaharlal Nehru University.

"However, what worries me is the threat of protectionism rising among the advanced economies. These economies are following an industrial policy, and are trying to strengthen their manufacturing base. Also, this form of protectionism doesn't only lead to higher tariffs but also different kinds of standards like labour standards, supply chain due diligence legislature, which can impact our exports going forward," Dhar added.

Also read |  Crude imports widen trade deficit with Russia by 33% in FY24

In its Global Trade Outlook and Statistics report released last month, the WTO said the volume of global merchandise trade will increase by 2.6% in 2024 and 3.3% in 2025 as economic pressures ease and incomes rise.

Global trade fall

During 2023, global trade declined 1.2% amid geopolitical and economic turmoil, after registering a 3% growth in 2022, the WTO data showed.

In value terms, the decline in merchandise exports was more pronounced in 2023, declining 5% to $24.01 trillion, while services exports increased by 9% to $7.54 trillion during 2023, partially offsetting the decline in goods trade.

Meanwhile, Indian exports remained flat to top markets like North America (including the US), Europe, and West Asia North Africa (WANA) region, while falling to other regions like Asean, South Asia, North East Asia, and Africa during FY24, according to commerce ministry data.

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