India’s merchandise exports to grow by 12.3% in June quarter: Exim Bank

An anticipated global easing of monetary tightening is expected to enhance global demand, which would provide further support to India's export growth

Dhirendra Kumar
First Published9 May 2024
Exim Bank forecasts non-oil exports to grow by 10.7% in the first quarter. (Bloomberg)
Exim Bank forecasts non-oil exports to grow by 10.7% in the first quarter. (Bloomberg)

The Export-Import Bank of India has predicted that India's total merchandise exports will reach $116.7 billion in the ongoing first financial quarter, growing 12.3% year-on-year on strong economic fundamentals and sustained manufacturing and services activity.

The Exim Bank also projected non-oil exports to grow by 10.7% to reach $93.9 billion in the first quarter.

Exim Bank's report underscored that an anticipated global easing of monetary tightening is expected to enhance global demand, which would provide further support to India's export growth. 

“The positive outlook for India's exports is supported by several factors. The key drivers for it are strong GDP growth fundamentals and outlook, along with sustained momentum in the manufacturing and services sectors,” India Exim Bank said in its report.

Global optimism

The projections are in sync with the World Trade Organization’s positive outlook for global trade, which is expected to benefit India's export growth. In its latest trade forecast, WTO estimated that global goods and merchandise trade would recover gradually this year from the downturn in 2023 due to high energy prices and inflation.

In its Global Trade Outlook and Statistics report, WTO projected the volume of global merchandise trade to increase by 2.6% in 2024 and by 3.3% in 2025, benefitting from easing economic pressures and rising incomes.

Also read: India's electronics, pharma, engineering goods exports beat global trade blues 

Exim Bank's forecast for India’s export growth follows recent data showing a narrowing merchandise trade deficit. 

In March, India’s trade deficit narrowed to $15.6 billion from $18.71 billion in February and $16.02 billion in January, according to commerce ministry data. This marks the lowest deficit in 11 months, with the previous lower figure recorded in April 2023 at $14.44 billion.

Risks remain

There are risks to Exim Bank’s positive outlook. Uncertain prospects for advanced economies, geopolitical shocks, and the potential escalation of the Red Sea crisis leading to deeper geoeconomic fragmentation could pose challenges to the forecasted growth.

Exim Bank releases its forecast for growth in India's total merchandise exports and non-oil exports quarterly in the first fortnight of May, August, November, and February for the corresponding quarters.

This forecast is based on its Export Leading Index (ELI) model. The next forecast on India's exports in the September quarter will be released in the first fortnight of August. 

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