India's merchandise trade crosses the $1 Trillion mark for the first time
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New Delhi, Jan 18: India’s merchandise trade crossed the $ 1 trillion mark in the calendar year 2022 with the share of exports at $450 billion and imports at $723 billion. This comes amid growing uncertainty on the external front. Outbound shipments grew 13.7 percent year-on-year (YoY) in 2022, while imports rose by 21 percent, commerce and industry ministry’s data showed.
Exports witnessed robust double-digit growth in the range of 34-20 percent during the first six months of the year.
Thereafter, the growth started falling to single digits from July onwards, closing the year at a 12 percent contraction. This comes as recession fears in developed economies weighed on exports from India. The sustained growth in exports can be attributed to the pent-up demand factor due to the opening up of most developed economies in 2021, with the easing of Covid restrictions. Besides, India saw a significant jump in exports to developed markets such as the US, Singapore, and Hong Kong, and European nations such as the Netherlands, the UK, Belgium, and Germany, among others. Before this, over the last decade, merchandise exports from India hovered around $260-330 billion, with the highest being $330 billion in the fiscal year 2018-19. Around this time, a substantial amount of goods were being exported to neighboring countries, predominantly the ASEAN nations. According to a report published by Global Trade Research Initiative (GTRI), the $1 trillion total merchandise trade has been achieved despite gloomy conditions worldwide. “This also prepares us for a tough year ahead as GDP (gross domestic product) growth in major economies slows down to less than 3 percent in 2023,” said the report, authored by former Indian Trade Service officer Ajay Srivastava. Of the total merchandise imports of $723 billion in 2022, two-thirds comprised five items — crude oil ($270 billion), coal ($80 billion), gold and diamond ($80 billion), electronics ($72 billion), and machinery ($55 billion), the report said.
On the other hand, exports have been dominated by engineering goods, gems and jewelry, drugs and pharmaceuticals as well as electronic goods. Mounting geopolitical turmoil due to the Russia-Ukraine conflict, high inflation, and monetary policy tightening in developed economies has resulted in recessionary trends in the US and Europe. Last year, the World Trade Organization (WTO) projected a 3 percent growth in the volume of global merchandise trade in 2022 compared to a 9.8 percent growth in 2021.