India’s merchandise exports growth could slow down to 4 per cent year-on-year in the September quarter after growing at 5.8 per cent in the June quarter of the current financial year, Export-Import Bank of India’s forecast said on Monday.
According to the Export-Import Bank of India, the growth in merchandise exports during the quarter ended September will be driven by “continued strong economic activity.”
However, the outlook is subject to several risks, such as the uncertain prospects for advanced economies, geopolitical shocks, the Middle East crisis, global supply chain disruptions, and deepening geoeconomic fragmentation, among other factors.
Merchandise exports are expected to see growth of 4.2 per cent year-on-year to $111.7 billion during the July-September quarter, India Exim Bank said. Exports, however, grew at a faster pace in the first quarter. During April-June, outbound shipments from India witnessed 5.8 per cent growth year-on-year to $109.9 billion.
It further said that non-oil exports are forecast to amount to $89.8 billion, with a year-on-year growth of 6.26 per cent during the July-September quarter. The positive growth rate in total merchandise exports and non-oil exports, as witnessed in the previous three quarters, is likely to continue, it said.
“Positive growth in India’s exports could result from the country’s continued strong economic activity, backed by sustained momentum in the manufacturing and services sectors, expected global monetary easing, and improving demand prospects in trading partners,” it said on Monday.
The forecast is based on Exim Bank’s in-house Export Leading Index (ELI) model, as part of its continued research initiatives to track and forecast the movement in India’s exports on a quarterly basis. The index gauges the outlook for the country’s exports and is developed as a leading indicator to forecast growth in total merchandise and non-oil exports of the country on a quarterly basis, based on several external and domestic factors that could impact exports.
According to the United Nations Conference on Trade and Development’s (UNCTAD) latest Global Trade Update released last month, the outlook for 2024 remains positive, but geopolitical issues and industrial policies will continue reshaping global trade patterns.
“Moderating global inflation and improving economic growth forecasts suggest a reversal of the downward macroeconomic trends that have characterized most of 2023. Additionally, rising demand for products related to energy transition and artificial intelligence should contribute to trade growth through 2024. However, the global trade outlook for 2024 remains subject to downside risks. Persistent geopolitical tensions, rising shipping costs, and emerging industrial policies could significantly impact global trade,” it added.
First Published: Aug 12 2024 | 3:42 PM IST
