Exports from the country fell 22 percent to $32.97 billion in June. Outbound shipments have declined for the seventh time in nine months and in the last month the decline deepened sharpest to 8-month low. Imports fell 17.5 percent to $53.1 billion, which also warrants some caution, and also this is the second consecutive month when trade deficit has been over $20 billion. Economy watcher are concerned over declining demand in the U.S. and European markets.

While goods exports fell sharply by 15.13% to $102 billion in the first quarter of 2023-24 against $450 billion for the whole 2022-23 fiscal, overall exports -- merchandise and services combined, fell 13 percent Y-o-Y in June; For the April-June quarter, the decline in overall exports stands at $182.70 billion -- 7.29 percent lower Y-o-Y. In June, the overall trade balance, narrowed from $10.92 billion to $8.89 billion, but overall the export scenario is not that encouraging, however.

Growth in services exports has been showing a downward trend for quite some time now and in June it dropped to a low of 0.7 percent y-o-y. This sector is a major contributor to the country’s foreign exchange earnings and key to keeping current account low. So, the service sector’s health needs to be taken care of as well, particularly in the background of slowing software exports amid declining demand in major markets. Meanwhile, according to a World Bank report, flow of foreign remittances to India may slow down to slow to 0.2% in 2023.