Amid declining Indian imports, shipments from Russia, Hong Kong see growth

In the realm of exports, India saw diverging trends among its top 10 markets

Among India’s top 10 import partners, only Russia and Hong Kong saw growth in inbound shipments during the first months of the current financial year (2023-24). This occurred at a time when the country’s overall imports declined by 12.2 per cent, owing to tepid demand and falling commodity prices.

Data compiled by the commerce department reveals that imports from Russia grew two-thirds to $30.4 billion during April-September. Russia became India’s second-largest import partner, after China.

Although disaggregated country-wise trade data was not available until September, the trend for the first five months indicated consistent growth, primarily due to crude oil imports from Russia.

In the case of Hong Kong, the rise was 2.6 per cent, totalling $10.2 billion. This growth was primarily driven by imports of electrical machinery during the first five months of the current financial year.

Among India’s top 10 import partners, a contraction in inbound shipments was observed in the case of China (minus 3.71 per cent), the US (minus 17.06 per cent), the United Arab Emirates (minus 25.51 per cent), Saudi Arabia (minus 31.26 per cent), Iraq (minus 31.25 per cent), Indonesia (minus 33.43 per cent), Singapore (minus 6.51 per cent), and South Korea (minus 8.03 per cent).

These 10 countries account for over 59 per cent of India’s merchandise imports.

India’s overall imports have been contracting for nine consecutive months. During April-September, the contraction has been due to tepid local demand and a fall in global commodity prices.

Non-gold imports, which serve as a proxy for domestic demand, have remained weak, declining by 10 per cent compared to a 35.7 per cent increase last year, as reported by Bank of Baroda economist Aditi Gupta.

Exports

In the case of the top 10 export markets, only the UK (14.6 per cent), the Netherlands (7.02 per cent), and Australia (17.22 per cent) witnessed growth during the first six months of the financial year. This growth was driven by demand for items such as petroleum products, apparel, and machinery.

Seven of India’s top 10 export partners — the US (minus 7.7 per cent), United Arab Emirates (3.7 per cent), China (minus 2.5 per cent), Singapore (minus 2.9 per cent), Saudi Arabia (minus 2.2 per cent), Bangladesh (minus 24.8 per cent), and Germany (minus 5.3 per cent) — experienced contraction during the first six months of the current financial year, resulting in an 8.8 per cent contraction in overall exports.

India’s overall merchandise exports witnessed an 8.8 per cent contraction compared to an increase of 16.9 per cent in the same period last year.

“Within this, while oil exports have declined by 17.5 per cent, non-oil exports have held up better and declined by only 6.3 per cent,” according to Gupta.