Agricultural, electronics, drug, and pharmaceutical exports continue to grow amid a broad-based decline in outbound merchandise shipments.
India's trade deficit eased to $15.2 billion in April on lower exports and imports. Merchandise exports fell 12.7% year-on-year to $34.66 billion, while imports declined 14.1% to $49.9 billion.
Shipments of only 10 of the top 30 major commodities rose in April on an annual basis. Electronic goods continue to lead, rising by 26.5% on an annual basis in April. Exports of agricultural commodities, led by rice, and electronic goods, drugs, and pharmaceuticals remain in the green.
The domestic electronics sector has been one of the key beneficiaries of the government's production-linked incentives, with a translation of policy action into domestic output and exports, according to a note by QuantEco Research. To be sure, growth in electronic goods shipments, too, slowed in April over the previous month.
Exports of ceramic products and glassware rose 17.2% in April.
The net service surplus remains robust at $13.9 billion in April, compared to $14.2 billion in March. Unlike merchandise exports, servicea exports rose 26.2% year-on-year in April.
Labour-Intensive Exports Stay In The Red
India's exports of labour-intensive items, from gems and jewellery to textiles and handicrafts, continue to be under pressure, delivering a double blow. A drop in outbound shipments from these sectors also impacts more jobs, largely in small and medium-scale units.
The maximum drag on exports was on account of gems and jewellery, with exports under this category having contracted in seven out of the last 10 months. This points towards a contraction in volumes as prices of precious metals have firmed up on average in recent months, QuantEco said.
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