India’s merchandise exports gain in value from global prices

New Delhi: India shipped out fewer goods for more money in the first three quarters of the current fiscal year.

While merchandise exports grew by over 10% in the April-December period in value terms, data shows that the volume of outbound shipments fell on account of elevated commodity prices and a slowdown in demand in key western markets.

Exports of key segments like petroleum products, articles of iron and steel, toys, beverage, cotton, and electrical machinery declined sharply during this period in volume terms. But they grew in double digits in dollar terms during these nine months of the current fiscal.While petroleum product exports grew 60% in value terms to $76bn in the April-December period, they declined 4% in volume terms.

However, in the case of imports, crude oil shipments were higher both in terms of value and volume.

Crude oil imports grew 52% in value and 11.2% in volume.

Incidentally, petroleum products accounted for 23% of Indian exports in value terms in these nine months, as against 15% in the same period last year, pointing at the rising contribution in merchandise exports.

Similarly, the overall segment of ‘articles of iron and steel’ shipments grew by 18% in value terms but declined 5% year-on-year in volume terms. Under that, structures of iron and steel grew by 35% in dollar terms to $1.2bn in this period, but were down 63% in volume terms. Following the Russian invasion of Ukraine in February 2022, prices of key commodities and Brent crude had shot up. Queries emailed to the ministry of commerce and industry remained unanswered till press time. But a government official said value is derived from the price of the commodity. For instance in the case of petroleum products, sometimes volume remains the same but the value rises.

According to a government official, the value is derived from the price of the commodity. For instance in the case of petroleum products, sometimes volume remains the same but the value rises.

“About 39.2% of our exports during the April-January period were directly linked to commodities, petroleum, agriculture and allied products and base metals. The data show better price realization in the global market, which improves our terms of trade. At the same time, the global market is not helping in stimulating demand for our major exports, since export volumes have declined,” said Biswajit Dhar, professor, Jawaharlal Nehru University.

Exports for rubber and articles were up 5.72% at $3.6bn in the April-December period, but down 13% in volume terms. Similarly electrical machinery exports grew by 44% in value terms to $20.5bn, but down 10.47% in volume terms.

Cotton exports rose by 48% in value terms to $4bn, but declined by 44% in volume terms.

Queries emailed to the ministry of commerce and industry on Tuesday remained unanswered till press time.

Ajay Srivastava, co-founder of think tank, Global Trade Research Institute in a study of items in the calendar year 2022 said that products that saw a growth in value terms accounted for nearly 70% of the total merchandise exports, while those that saw growth in volumes over the previous year accounted for $285.6 bn exports, which is 63% of India’s total outbound shipments. He added that in calendar year 2022, there were products with a total value of $80.4bn , which saw a rise in unit price, but decline in volume exports.

These accounted for 17.8% of India’s total merchandise exports. Items in this category include cut and polished diamonds, with an export value of US$23 billion, reporting a rise of 16% in unit value realization. Benzene and Xylene, with an export value of US$2.6 billion, saw an increase of 13% in unit value realization. “High input cost in such products translates into high unit prices,” said Srivastava.