India’s trade deficit widens to $267 billion; exports up 6%

The sharp jump in imports led to a 39.63% increase in trade deficit when compared with the previous year

India’s merchandise trade deficit widened to $266.78 billion in the financial year ended March 2023 as against $191.05 billion in the previous year as import bills surged due to elevated prices of petroleum products while exports remained sluggish amid global headwinds.

Merchandise exports increased to $447.46 billion in 2022-23 as against $422 billion recorded in the previous year, registering a growth of 6.03 per cent, as per data released by the Ministry of Commerce and Industry.

Imports rose at a sharper pace due to elevated prices of petroleum products, coal, and transport equipments. The value of merchandise imports surged to $714.24 billion in 2022-23 as against $613.05 billion in the previous year, registering a growth of 17.38 per cent.

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The sharp jump in imports led to a 39.63 per cent increase in trade deficit when compared with the previous year.

In March, India’s exports slumped by 13.9 per cent year-on-year to $38.38 billion as compared to $44.57 billion recorded in the same month last year, while imports declined by 7.9 per cent year-on-year to $58.11 billion.

“The impact of economic slowdown in major advanced economies has been visible in global trade,” said EEPC India chairman Arun Kumar Garodia.
“However, India has still managed to minimise the impact by taking several policy measures such as expanding the rupee trade, roll-back of export duty on specified steel products, and easing procedures,” he said.

India’s overall exports (merchandise and services combined) rose by 13.84 per cent year-on-year to $770.18 billion in 2022-23. Overall imports rose at a sharper pace of 17.38 per cent to $892.18 billion. India’s overall trade deficit widened to $122 billion in 2022-23 as against $83.53 billion in the previous year.

The overall exports during the year is higher than the government’s target of $750 billion. “Despite global headwinds, we have not only achieved the target but also surpassed it,” said Commerce Secretary Sunil Barthwal.

Imports from Russia surged by 396.44 per cent in 2022-23 as India aggressively bought Russian oil available at a discount after the US and other western countries imposed sanctions on Moscow.

China's share in overall India's merchandise imports declined to 13.79 per cent in 2022-23 from 15.43 per cent in 2021-22. Imports of electronic goods from China declined by around $2 billion in 2022-23 when compared with the previous year.

In services trade, India enjoys surplus. Services trade surplus rose to $144.78 billion in 2022-23 from $107.52 billion in 2021-22.