Home/ Economy / Non-essential imports on watch

The Centre is closely tracking import of non-essential items, said commerce ministry officials after government’s data showed India’s imports surged 5% to $55.88 billion in November compared with $53.03 billion in the year-ago period.

India’s merchandise exports in November remained flat at $31.99 billion, against $31.80 billion in the year-ago period, official data released late Thursday evening showed.

“World Trade Organization, International Monetary Fund, and United Nations Conference on Trade and Development projections are very clear that there’s a slowdown, particularly in the second half of this financial year and even next year. There is a tapering effect of the stimulus that was given during covid. We are aware of hikes in interest rates and high inflation, though of late, there are some signs of cooling," said L. Satya Srinivas, an additional secretary, commerce ministry, during a press briefing.

“The data has to be seen in the global context considering the supply chain disruptions, and efforts to reconfigure supply chains and the transition towards a greener economy," he added.

Trade gap, meanwhile, narrowed to $23.89 billion during November compared with $26.91 billion in October as imports fell to $55.88 billion from $56.69 billion in October.

A. Sakthivel, president of Federation of Indian Export Organisation, said that the marginal increase in merchandise exports is a reflection of hardening global trade conditions on account of higher inventories, world economies entering recession, and high volatility in currencies, besides geopolitical tensions.

“The dip in commodity prices and restrictions on some exports to stem price increase in the domestic market, have also affected the growth numbers. We must look at the Fed rate hike, as that may also add pressure on the flight of capital with the Bank of England also going for a rate hike," he said.

Rajani Sinha, chief economist, CareEdge, said merchandise exports saw flat growth in November, but was lower than the levels seen in recent times. “While the lower import bill may be attributed to some easing on the global commodity price front, import performance in the next few months will be key for signs of any weakness in demand in the domestic market. The silver lining in the trade data is a moderation in trade deficit to a five-month low of $24 billion. However, sustenance of this trend will be critical," Sinha added.

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Updated: 16 Dec 2022, 10:22 PM IST
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