Editor's Pick: Exports drop by 12.2% in a year on slow demand

India exported goods worth $34.48 billion in December 2022, constituting a 7.75% rise from November’s $32 billion figure but a steep 12.2% dip from a year ago, amid slowing global demand. Imports also contracted 3.5% to $58.2 billion from $60.33 billion a year ago. This is the second time in three months that the value of outbound merchandise shipments has tanked year-on-year. In October 2022, goods exports had dropped 16.7% to slip below the $30 billion mark for the first time in 21 months, and risen a mere 0.6% in November. Consequently, the country’s merchandise trade deficit eased slightly from just under $24 billion in November to $23.76 billion in December, remaining under the $25 billion mark for the second month in a row after five months of $25 billion-plus deficits, including the record $30 billion deficit in July 2022. The Commerce and Industry Ministry stressed that the ‘high base effect’ from December 2021 was at work too, while pointing out that merchandise exports stood at $39.27 billion that month, marking the second-highest monthly merchandise and services exports during 2021-22. “Global growth forecasts indicate a downturn in global economic activity and trade. As per Global Composite Purchasing Managers’ Index report (January 2023), new export orders have been contracting for the tenth successive month in December,” the Ministry said in a statement. Despite a dip in two months, merchandise exports in the first nine months of 2022-23 are still 9.1% higher than a year ago at $332.76 billion. Goods imports, on the other hand, are up 25% at $551.7 billion. Shipments from as many as 19 of 30 major exporting sectors shrank in December, including cotton yarn and handlooms, handicrafts, petroleum products, plastic and linoleum, gems and jewellery. Engineering goods exports, the mainstay of India’s exports in recent years, dropped nearly 12% in December 2022. Overall engineering exports are down 3% so far in 2022-23 following six consecutive months of contraction. Exports from the employment-intensive readymade garments (RMG) sectors grew a mere 1.02% in December and the Ministry attributed the woes of the textiles sector, especially cotton yarn, ‘to the continuous price rise of raw materials throughout 2022’. Here’s an explainer on why India’s slowing exports a cause for concern. Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor’s Pick and more. Click here. 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[Arrow]( [Open in browser]( [Mail icon]( [More newsletters]( Exports drop by 12.2% in a year on slow demand India exported goods worth $34.48 billion in December 2022, constituting a 7.75% rise from November’s $32 billion figure [but a steep 12.2% dip from a year ago]( amid [slowing global demand](. Imports also contracted 3.5% to $58.2 billion from $60.33 billion a year ago. This is the second time in three months that the value of outbound merchandise shipments has tanked year-on-year. In October 2022, [goods exports had dropped 16.7%]( to slip below the $30 billion mark for the first time in 21 months, and risen a mere 0.6% in November. Consequently, the country’s merchandise trade deficit eased slightly from just under $24 billion in November to $23.76 billion in December, remaining under the $25 billion mark for the second month in a row after five months of $25 billion-plus deficits, including the [record $30 billion deficit in July 2022](. The Commerce and Industry Ministry stressed that the ‘high base effect’ from December 2021 was at work too, while pointing out that merchandise exports stood at $39.27 billion that month, marking the second-highest monthly merchandise and services exports during 2021-22. “Global growth forecasts indicate a downturn in global economic activity and trade. As per Global Composite Purchasing Managers’ Index report (January 2023), new export orders have been contracting for the tenth successive month in December,” the Ministry said in a statement. Despite a dip in two months, merchandise exports in the first nine months of 2022-23 are still 9.1% higher than a year ago at $332.76 billion. Goods imports, on the other hand, are up 25% at $551.7 billion. Shipments from as many as 19 of 30 major exporting sectors shrank in December, including cotton yarn and handlooms, handicrafts, petroleum products, plastic and linoleum, gems and jewellery. [Engineering goods exports, the mainstay of India’s exports in recent years]( dropped nearly 12% in December 2022. Overall engineering exports are down 3% so far in 2022-23 following six consecutive months of contraction. Exports from the employment-intensive readymade garments (RMG) sectors grew a mere 1.02% in December and the Ministry attributed the woes of the textiles sector, especially cotton yarn, ‘to the continuous price rise of raw materials throughout 2022’. [Here’s an explainer]( on why India’s slowing exports a cause for concern. Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor’s Pick and more. [Click here]( . 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