FY24 Overall Exports Gain Marginally As Electronics, Engineering Goods Register Highs

In a year marked by global trade disruptions, India’s overall exports in FY24 are estimated to reach $776.68 billion, marginally improving the levels seen in FY23 at $776.40 million, led by robust growth in electronics, engineering, pharmaceuticals, and iron ore, among other segments.

Global headwinds such as the Red Sea crisis, the continuing war in Ukraine and climate-induced droughts along the Panama Canal have restricted maritime travel, impacting India's merchandise exports,whicht fell by 3.11%, dropping from $451.07 billion in 2023 to $437.06 billion.

However, there was a 4.39% growth in services exports, which rose from $325.3 billion to $339.6 billion, boosting the overall export figure.

"This year was a difficult year from a trade perspective," Commerce Secretary Sunil Barthwal told the media on Monday. "In terms of services, this is the highest ever-overall figure we have seen for the country."

The World Trade Organisation has predicted that global merchandise trade volume will rebound to 2.6% in 2024 and 3.3% in 2025, from 1.2% in 2023.

Barthwal noted that India is "looking at an upcycle in growth figures" just as global trade looks up. "We are internationally aligned," he said.

Electronics exports rose 23.64% between FY23 and FY24, standing out as one of India's top export increases.

Global Trade Research Initiative co-founder Ajay Srivastava said that electronics exports, where India has traditionally been weaker, grew due to government initiatives like the Production-Linked Incentive scheme and other 'Make-in-India' efforts. "Smartphone exports are expected to rise by 30% to over $15 billion," said Srivastava, who is also a former Indian Trade Services official.

Traditionally, labour-intensive sectors like marine products, gems and jewellery, textiles, apparel, and leather experienced a decline, reflecting a need to revitalise them, said Srivastava.

In FY24, year-on-year growth in exports increased in engineering goods (2.13%), drugs and pharmaceuticals (9.67%) and iron ore (117.74%). On the imports front, petroleum and products fell sharply by 14.23% to $179.62 billion during FY24, with a 4.4% decline seen during March.

Iron ore also exhibited an increase in merchandise exports amounting to $3.91 billion—a majority of which, 93.23%, was exported to China.

Gold imports decreased by more than half to $1.53 billion in March 2024 from $3.3 billion in March 2023. However, for the full year, they rose 2.72% to $45.54 billion.

On a forward-looking note, the PhD Chamber of Commerce and Industry noted that they anticipate a great growth trajectory in FY25 on the back of increased demand for Indian goods in foreign markets, supported by the ease of doing exports in the country.

Ashwani Kumar, the president of the Federation of Indian Export Organisations, reiterated that the need of the hour is to address the Middle East geopolitical situation and the Red Sea crisis challenge by ensuring the availability of marine insurance and a rational increase in freight charges. "The sector also needs easy and low-cost of credit, marketing support, besides conclusion of some of the key FTAs with the UK, Peru and Oman soon," Kumar said.

The Commerce Secretary said that India is "open to remedial measures" owing to any fallout on trade due to the conflict between Israel and Iran, before adding that India was still "observing the situation and would intervene with policy interventions after understanding traders’ issues."

The ministry noted that it is in touch with export promotion councils, container companies, shipping firms and other line ministries.

"Based on that, we do internal analysis and if it is prolonged (the Israel-Iran conflict), then we will see what steps may need to be taken. If any remedial measures are needed, the government is open, but it will depend on how the situation plays out," Barthwal said.