Strong export performance in electronic goods, notably smartphones, and services sectors would assist India in limiting the total trade growth rate, which is predicted to shrink by 2.6 percent this year.
According to the Global Trade Research Initiative (GTRI), despite global issues, India’s exports and imports of goods and services are anticipated to fall by 2.6 percent to $ 1,609 billion in 2023, down from $ 1,651.9 billion in 2022.
The dip in India’s merchandise exports follows the global trend of a 5% drop (as per UNCTAD’s Global Trade Update) and is consistent with China’s 5.2 percent loss in merchandise exports between January and November 2023.
The World Trade Organization (WTO) predicts that global commercial trade volume will increase by 0.8% in 2023. Aviation turbine fuels, motor gasoline, smartphones, basmati rice, medium-sized motor cars, turbo-jets, and auto components are predicted to expand in 2023. Smartphone exports are predicted to increase by around 93% this year to $ 14 billion, up from $7.2 billion in 2022. Smartphones will be a huge success story in India by 2023. This huge gain will add to India’s overall increase in electronics exports, which reached $ 26.8 billion, a 26.2 percent increase.
Imports of finished electronic products such as PCs, laptops, and other gear may fall by more than 10% this year. Engineering goods, petroleum products, chemicals, jewels and jewellery, readymade garments of all textiles, cotton yarn/fabrics/made-ups, handloom items, plastic, marine products, leather, carpets, handicrafts, and tea are projected to collapse in 2023. According to the analysis, India’s merchandise exports may fall by 5.3% to $ 429.4 billion in 2023 from $ 453.3 billion in 2022. Similarly, imports may fall by 7% this year to $ 670 billion, compared to $ 720.2 billion in 2022.
In contrast, services exports are predicted to increase by 10.5% to $ 333.5 billion in 2023, up from $ 302 billion in 2022. Imports, on the other hand, are expected to expand at a constant rate of $ 176.4 billion in 2023.
Surprisingly, this drop in exports happened despite the Indian Rupee (INR) significant decline versus the US Dollar ($). The average INR/$ exchange rate fell from 77.5 in June 2022 to 82.1 in June 2023 during the year. A lower native currency can enhance exports by increasing the competitiveness of a country’s products on the global market.