Merchandise exports rose 3.1 percent y-o-y in January to $36.92 billion. This is the second successive month of growth which, however, marks only the fourth month of growth in 2023-24. In December, merchandise exports grew by 0.96 percent y-o-y to $38.45 billion, but it was 4 percent higher than January’s tally. While these figures are not that encouraging, the sequential downturn can hardly be ascribed to the ongoing Red Sea crisis.

Overall value of goods exports for the period April-January 2023-24 stood at $353.92 billion against $372.10 billion during April-January 2022-23 and it now seems that attaining last year’s $451 billion target will not be easy task. Noticeably, trade deficit fell sharply to a 9-month low of $17.49 billion, which on the one hand reflects strengthening macroeconomic fundamentals and on the other hand suggests weakening of investment and consumption.

Services exports – which amount to $32.80 billion, as compared to $28.00 billion in January 2023-- is clearly encouraging. Services exports for April-January 2023-24 is estimated at $284.45 billion as compared to $267.50 billion in April-January 2022-23, resulting in an estimated trade surplus of $136.77 billion as against $117.38 billion. It seems this will help to push our overall exports for the year close to previous year’s tally.