The Business Bytes
New Delhi, December 4, 2024 (TBB Bureau): India’s trade landscape exhibited resilience and moderate growth during the first half of 2024, with total trade increasing by 5.45% year-on-year to $576 billion, according to NITI Aayog’s latest Trade Watch Quarterly Report. Released on Wednesday, the comprehensive report offers insights into the country’s trade performance, sectoral dynamics, and emerging opportunities against a backdrop of global economic uncertainty.
India’s merchandise exports grew by 5.95% in Q1 FY25 to reach $110 billion, while imports surged by 8.40% to $173 billion, widening the trade deficit. Sectors like iron and steel, and natural and cultured pearls experienced significant declines in export volumes due to weak domestic demand and global oversupply, particularly in China.
Conversely, imports were bolstered by high-value goods, including aircraft, spacecraft, mineral fuels, and vegetable oils, reflecting strong domestic demand in these segments. On a positive note, services exports continued to demonstrate robust performance, contributing to a surplus in India’s overall trade balance.
North America emerged as the top destination for Indian exports, accounting for 21% of total shipments, followed by the EU at 18.61%. Imports, however, were concentrated in Northeast Asia, West Asia (GCC), and ASEAN countries, which together contributed 51% of India’s total imports.
Export growth with Free Trade Agreement (FTA) partners stood out, recording a robust 12% increase, while imports from these partners rose by 10.29%, highlighting the potential for deepened trade ties.
The report highlighted a steep 33% drop in iron and steel exports, primarily driven by oversupply from China and subdued global demand. However, sectors such as software services and pharmaceuticals maintained a steady growth trajectory, underscoring India’s competitive advantage in knowledge-driven industries.
NITI Aayog CEO B.V.R. Subrahmanyam emphasised the significance of leveraging data and analytics to shape India’s trade strategy. “This initiative supports evidence-based policymaking, aiming to enhance India’s trade competitiveness and capitalise on the nation’s potential for Viksit Bharat (India@2047),” he stated.
The Trade Watch Quarterly Report serves as a strategic tool for policymakers and businesses, identifying potential markets, analysing sectoral trends, and assessing the implications of geopolitical tensions on trade. The publication also underlines the critical role of international trade in promoting higher living standards and poverty reduction, aligning with India’s vision for sustainable growth.
