Economy Blues: Exports Plunge 12.2% in December; Trade Deficit Widens to $23.76bn

New Delhi: India's exports contracted 12.2% $34.48 billion in December 2022, mainly due to global headwinds, and the trade deficit widened to $23.76 billion during the same period, according to official data released on Monday.

Imports in December 2022 also declined 3.5% to $58.24 billion against $60.33 billion in the year-ago period.

In December 2021, exports stood at $39.27 billion and the trade deficit was at $21.06 billion.

During April-December of this fiscal, the country's overall exports rose 9% to $332.76 billion while imports increased 24.96% to $551.7 billion.

The merchandise trade deficit for the April-December 2022 period was estimated at $218.94 billion against $136.45 billion in April-December 2021.

Commerce Secretary Sunil Barthwal said that despite global headwinds, "India's exports have held its head high".

"There are recessionary trends globally. So lot of headwinds we are facing," he said.

In the first nine months of the current fiscal, crude oil imports rose 45.62% to $163.91 billion against $112.56 billion in the year-ago period.

Similarly imports of coal, coke and briquettes almost doubled to $40.55 billion during April-December 2022-23 against $21.66 billion in the same period previous fiscal.

On the export front, engineering shipments declined about 12% in December to $9.08 billion while exports of gems and jewellery in December fell 15.2% to $2.54 billion.

Other export sectors which recorded negative growth in December 2022 include coffee, cashew, leather goods, pharma, carpet and handicrafts.

Petroleum products exports too contracted about 27% to $4.93 billion in December last year.

The secretary said that measures like production-linked incentives for electronics sector is helping to push exports. Exports of electronic goods increased 51.56% to $16.67 billion during April-December 2022-23.

Imports from Russia jumped four-times to $32.88 billion during the April-December 2022 period on account of the decision of the government to import more crude oil, taking advantage of the lower price.

As a result, the secretary said India has been able to export petroleum products significantly.

In December, oil imports rose about 6% to $17.5 billion. Gold imports dropped 75% to $1.18 billion.

Imports from China too rose about 12% to $75.87 billion in April-December 2022 period. Exports to China, however, fell 35.58% to $11 billion.

In April-December this fiscal, the US has emerged as the largest export destination with a growth of 6.8% at $59.57 billion. It was followed by the UAE, Netherlands, Bangladesh and Singapore.

Barthwal said the ministry is undertaking a detailed analysis country-wise as well as commodity-wise to resolve any issue of exporters and push shipments.

"We are in constant touch with all the export promotion councils," he said.

"The resilient growth of the Indian economy during the first half of the current financial year, the fastest among major economies, bespeaks strengthening macroeconomic stability.

"However, global growth forecasts indicate downturn in global economic activity and trade," the ministry said.

Further, it said that given the cumulative growth until December 2022 and the indicators of the slowdown in global economic activity, there is cautious optimism on international trade in the last quarter of the current financial year.

Sanjay Budhia , Chairman of CII National Committee on EXIM, said the decline in exports is to be expected given the monetary tightening by major large markets.