India's Exports Fell Across Commodities And Geographies — In Charts

India's exports dropped in October, having fallen across commodities. And outbound shipments are coming off across geographies as well.

Exports fell to $29.8 billion in October to a 20-month low and a contraction of 6.6% year-on-year, according to government data. On a sequential basis, too, exports contracted 16% in October.

Of 30 major export commodities comprising close to 95% of all of India's merchandise exports, 24 saw a decline on an annual basis.

While oil exports fell 11.3% year-on-year to $4.8 billion in October, non-oil exports dropped 17.6% to $25 billion.

Engineering goods and gems and jewellery exports slid over 20% over a year earlier. Iron ore saw the steepest decline at 90% . Rice, India's largest agricultural export, and electronic goods, continued to pick up annually.

Sequentially, there was a drop across categories in October.

Engineering goods, India's largest exports, fell to a 20-month low in October. The segment's shipments stood at $7.4 billion, down 21.3% year-on-year.

"With the ongoing Russia-Ukraine war threatening to push major advanced economies into recession, exports of engineering goods have seen a slowdown in the past few months and the coming months are likely to be challenging as uncertainty continues," said Arun Kumar Garodia, chairman of the Engineering Export Promotion Council.

The decline in exports of major labour-intensive sectors including engineering goods, apparels and textiles, gems & jewellery, petroleum product, organic & inorganic chemicals, drugs & pharmaceuticals, marine products, leather & leather products besides many agri product sectors is of particular concern as these sectors are key to huge employment generation, A Sakthivel, president of Federation of Indian Export Organisations, said.

"At the same time, the growth in exports of electronic goods on a sustained basis is a good sign besides growth in exports of few agricultural products including oil seeds, oil meals, tobacco, tea and rice," Sakthivel said.

"Exports are now close to pre-pandemic levels, in nominal seasonally adjusted terms, they are 5% higher than in February 2020," said Pranjul Bhandari, chief India economist at HSBC. "In June, they were 49% higher than pre-pandemic levels."

The fall in exports is not just in value terms, she said, adding that exports have been softening since June even by volume.

Merchandise exports to the United States of America—India's largest export destination—eased for the third straight month in September.

In the current fiscal, the U.S., the United Arab Emirates, the Netherlands, China, and Bangladesh formed India's largest export destinations. Exports to the U.S., the U.A.E. and Bangladesh fell to the lowest in the ongoing fiscal in September.

Exports to China—which was India's third largest export destination then—have seen a sharp fall of 36.2% to $7.8 billion in April-September 2022 compared with a year earlier.

To be sure, imports rose 23.6% year-on-year to $52.4 billion between April-September.

While the working day adjustment would turn favorable in November 2022, exports are unlikely to see a major revival, QuantEco Research said in a note.

Weakening global demand on account of rapid tightening of financial conditions and persistent geopolitical uncertainty would continue to impinge upon export momentum in the second half of the ongoing fiscal, compared with the first half, it said.

As external headwinds continue, the government should roll back the 15% export duty on stainless steel and alloy steel items as the levy has affected engineering exports considerably, Garodia said.

In the current situation, the focus should be on providing liquidity at competitive cost to the export sector, said Sakthivel. With a rise in interest rates, there is a case to restore the interest equalisation support to 5% and 3%, respectively, as existed prior to the Covid period, he said.