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India’s Trade Deficit Widens on a Year-On-Year Basis in January

India's January 2023 trade deficit stood at $17.03 billion and $19.8 billion in December.
Representative image. Photo: Unsplash

New Delhi: India’s merchandise trade deficit widened on a year-on-year basis, reported the Economic Times.

India’s January 2023 trade deficit stood at $17.03 billion and $19.8 billion in December.

It had reached a record high of $29.9 billion in October. However, it decreased for the third consecutive month to a nine-month low of $17.5 billion in January, according to provisional estimates from the Commerce Ministry.

According to the Hindu, goods exports rose by 3.1% year-on-year to $36.92 billion, while imports increased by 3% to $54.4 billion. Services exports are estimated to have expanded by 17.5% to $32.8 billion.

Despite challenges such as the Red Sea crisis and falling commodity prices, exports saw growth.

Commerce secretary Sunil Barthwal was reported by the daily as saying that the uptick in exports was significant as it was achieved “despite the Red Sea crisis, the recessionary conditions in advanced countries and despite the falling commodity prices”. The ministry, he said, had been working with other departments to help exporters navigate the difficult situation in the Red Sea.

“We told banks that whatever credit can be extended to exporters, it should be done, while the Export Credit Guarantee Corporation and the Exim Bank were told not to increase insurance rates. Given such difficult circumstances, if we have grown, that speaks volumes about our exporters. We will continue our efforts to ensure that growth is recorded in the coming period also,” he added.

Notably, several export sectors recorded positive growth in January, while imports saw declines in various sectors.

Out of the top 30 export sectors, 18 registered positive growth in January led by iron ore (109.8%), tobacco (47.3%), meat, dairy and poultry products (26.1%) and spices (20.5%). On the imports front, 17 sectors clocked a decline in shipment values, including fertilisers (-69.1%), project goods (-43.9%), and raw cotton (-32.3%).

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