India's foreign trade set to cross $1.6 trillion mark this fiscal: GTRI report

India's foreign trade is expected to cross the $1.6 trillion mark this fiscal despite global economic uncertainties, economic think tank GTRI said in a report.

The Global Trade Research Initiative (GTRI) said the $1.6 trillion would be about 48 per cent of India's nominal GDP of $3.4 trillion for the fiscal year ending March 2023.

The higher trade-to-GDP ratio also speaks of high trade openness which the country practices, GTRI co-founder Ajay Srivastava said.

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According to their analysis of the data by the think tank, the growth rate in the exports of services would be higher than that of goods.

Higher growth rate in services exports compared to the outbound shipments of goods has improved overall performance of India's exports, he said.

India's overall exports of goods and services during April-March 2023 are estimated to reach $755 billion, exhibiting a positive growth of 11.6 per cent over the same period last year (April-March 2022).

The report said that India's merchandise exports during the fiscal are likely to increase by about 5 per cent to $442 billion. Similarly, services exports are estimated to grow by 22.6 per cent to $311.9 billion in 2022-23.

“India's foreign trade (exports and imports of merchandise and services) is estimated to cross $1.6 trillion or 48 per cent of India's nominal GDP of $3.4 trillion for the fiscal year ending March 2023,” it added.

In 2021-22, India's foreign trade stood at $1.43 trillion.

Despite sectoral weaknesses, high trade figures underline the emergence of trade as an important component of the Indian economy, it said.

Key sectors which are expected to register healthy growth include basic and processed agriculture products; fish, meat, dairy; petroleum items, chemicals, diamonds, machinery and automobiles.

The top export destinations include the US, UAE, the Netherlands, China, Bangladesh, Singapore, the UK and Germany.

On the outlook for exports during the next fiscal, Srivastava said that 2023 will make most countries turn inward to stay safe from the global headwinds, not of their creation.

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“Indian exports will be moderately impacted by weak global demand and recession in large economies but will gain as the domestic economy looks resilient and exports from high growth sectors like electronics are picking up almost for the first time," he added.

Further, the report said that the estimated value of exports of petroleum products and coal this fiscal year would be around $98.2 billion, an increase of over 41 per cent.

Similarly, the country's outbound shipments of electronics, and electrical machinery are expected to grow by about 36 per cent to $27.4 billion.

The commerce ministry is scheduled to release the trade data for 2022-23 on April 15.