In continuation of the declining trend that has been observed since June last year, India’s exports and imports continue to shrink across many nations for most items.
- The imports have declined more than the exports thus narrowing the trade deficit.
- While the decline in exports was widespread, affecting most of the major items, the decline in imports was also recorded across all major commodities.
- However it should be noted that the fall in imports and exports was not limited to India, many nations have recorded similar declines, pointing to slowing global demand.
Predictions of Global Slowdown:
- The 2022-23 Indian Economic Survey had warned that the ‘slowing global demand will weigh on India’s merchandise exports’.
- The International Monetary Fund (IMF)’s forecast had also warned that global growth will slow down in 2022 and 2023.
- According to IMF if the financial sector stress in the U.S. triggered by the sudden collapse of three regional banks is not contained, then the world would see “weakest growth since the global downturn of 2001. (barring the initial COVID-19 crisis in 2020 and the global financial crisis in 2008-09).
- The Economic Survey had also said that the “non-oil, non-gold imports, which are growth-sensitive may not witness a significant slowdown as Indian growth continues to be resilient.
- The contraction of India’s merchandize export has also been broad-based.
- Due to internal demand slowdown and external geo-political tensions, both imports and exports of many developed and developing countries have been contracting in 2023.
SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB