Merchandise exports decline marginally in July on global worries

Merchandise exports declined marginally (a little over one percent) to $33.98 billion in July because of the continuous, on-going international trade disruptions.

The major drivers of merchandise exports growth in July 2024 include electronic goods, engineering goods, drugs & pharmaceuticals, meat, dairy & poultry products and RMG of all textiles. "Electronic goods exports increased by 37.31 percent from $2.04 billion in July 2023 to $2.81 billion in July 2024," says an official release.

"The sharp drop in crude, commodities and metal prices have also played their role in declining values of exports," says Ashwani Kumar, President, Federation of Indian Export Organisations (FIEO). "Some of the exporters have diverted to the domestic market as profitability in exports have taken a hit with a sharp rise in international freight (both ship and air)."

Kumar added that had it not been for trade disruptions led by logistical challenges such as lack of container availability, shipping space, irregular shipping schedule and ships skipping Indian ports, merchandise exports would have recorded positive growth.

"The need of the hour is to take steps on the liquidity front with deeper interest subvention support and extension of interest equalisation scheme for at least five years," says Kumar. "Besides, addressing the Middle East geopolitical situation, Red Sea challenges by ensuring availability of containers, marine insurance and rationale increase in freight charges, the government may also look at facilitating trade through easy & low cost of credit, marketing support and conclusion of some of the key FTAs with UK, Peru and Oman soon."

The cumulative value of merchandise exports during April-July 2024 was $144.12 billion as compared to $ 138.39 billion during April-July 2023, an increase of 4.15 percent, the release added.

The top five export destinations, in terms of change in value, exhibiting positive growth in April-July 2024 are The Netherlands (38.32 percent), U.S. (9.06 percent), UAE (13.48 percent), Malaysia (51.86 percent) and Singapore (24.4 percent), the update added.