India’s Trade Data for August 2024: Mixed Reactions from Experts
New Delhi, India – India’s trade data for August 2024 has received mixed reactions from industry experts, showing both optimism and concern.
Positive Growth in Exports
The PHD Chamber of Commerce and Industry (PHDCCI) praised India’s resilience in exports, noting a 5.3% year-on-year growth in overall exports between April and August 2024. The cumulative value of merchandise and services exports during this period reached USD 374.3 billion, up from USD 350.1 billion in the same period in 2023. PHDCCI President Sanjeev Agrawal attributed this growth to rising exports of electronic goods, tea, coffee, spices, and cereal preparations. He projected continued export strength as India’s supply chains grow stronger.
“We look forward to a great export growth trajectory in the current financial year. As India’s supply chains become stronger, the export trajectory is expected to perform robust in the current financial year,” said Agrawal.
Concerns Over Decline in Goods Exports
However, the Federation of Indian Export Organisations (FIEO) expressed concerns over August’s goods exports, which declined by over 9% year-on-year to USD 34.71 billion. FIEO President Ashwani Kumar pointed to global economic uncertainties, falling commodity prices, and logistical challenges as key factors behind this decline. He also noted that disruptions in international trade, coupled with falling crude and metal prices, have hurt merchandise exports. Additionally, higher freight costs and shipping difficulties have pushed some exporters to focus on domestic markets instead.
“The ongoing international trade disruptions along with drop in crude and metal prices have also played key role in bringing down the value of exports,” added Kumar.
Engineering Sector Shows Optimism
In the engineering sector, optimism persisted. The Engineering Export Promotion Council (EEPC) India Chairman Arun Kumar Garodia reported a 4.36% growth in engineering exports in August 2024, reaching USD 9.44 billion. Cumulatively, engineering goods exports totaled USD 46.41 billion for the April-August period, marking a 4.22% year-on-year increase. However, Garodia noted that the overall performance could have been stronger if not for the decline in iron and steel exports, which he attributed to competitive pricing from China, geopolitical conflicts, and protectionist policies in major markets like the US and EU.
“This could be partly attributed to very competitive pricing from China, geopolitical conflicts in Europe and West Asia, and protectionist policies in the USA and EU. Additionally, there is growing concern among the exporting community about Chinese steel entering India through FTA routes, bypassing tariffs intended to protect domestic production,” said Garodia.
Looking ahead, Garodia expressed cautious optimism for the engineering sector, citing positive measures from the 2024 Budget and the potential for improved global economic conditions. He also urged a review of free trade agreements (FTAs) to address concerns over Chinese steel entering India through FTA routes.
As industry experts weigh the pros and cons of the latest trade data, the path forward for India’s export sector remains dependent on both global market conditions and domestic policy interventions.
Doubts Revealed
Trade Data -: Trade data is information about the buying and selling of goods and services between countries. It shows how much a country exports (sells to other countries) and imports (buys from other countries).
Mixed Reactions -: Mixed reactions mean that different people have different opinions. Some people are happy with the trade data, while others are worried or unhappy.
PHD Chamber of Commerce and Industry (PHDCCI) -: PHDCCI is a group of business people in India who work together to help businesses grow. They give advice and support to companies.
Federation of Indian Export Organisations (FIEO) -: FIEO is a group that helps Indian companies sell their products to other countries. They work to make exporting easier and more successful for Indian businesses.
Engineering Export Promotion Council (EEPC) -: EEPC is a group that helps Indian companies sell engineering goods, like machines and tools, to other countries. They support businesses in the engineering sector.
Year-on-year growth -: Year-on-year growth means comparing data from one year to the same time in the previous year. For example, comparing exports in August 2024 to exports in August 2023.
Geopolitical conflicts -: Geopolitical conflicts are disagreements or fights between countries. These conflicts can affect trade because they make it harder for countries to do business with each other.
