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India's electronics, pharma, engineering goods see rise in export value; FY24
Industry News- May 25,24
The WTO expects global goods and merchandise trades to recover gradually.
India's electronics, pharmaceuticals, and engineering goods sectors have experienced an upsurge in their export values during the fiscal year 2024 (FY24). This growth comes against a backdrop of global challenges such as elevated interest rates dampening demand and geopolitical tensions driving energy prices upward. With the World Trade Organization (WTO) projecting a gradual recovery in global trade for goods and merchandise, these sectors, along with iron ore, are anticipated to sustain export momentum into FY25.
According to data from the commerce ministry, the export value of engineering goods, representing approximately 25% of the export basket, expanded by around 2.14% annually during FY24. Conversely, petroleum products and gems & jewelry, with shares of 18.6% and 7.6% in the export basket respectively, saw declines of 11.8% and 13.83% during the same period. Organic and inorganic chemicals, constituting roughly 7% of the export basket, also experienced a downturn, falling by 2.78% in value terms during FY24.
However, electronic goods and pharmaceuticals, together contributing around 14% to India's export basket, displayed robust growth rates of 23.5% and 9.73% respectively in FY23, which further bolstered their performance in FY24.
Overall, India's merchandise exports for FY24 totaled $437.06 billion, down from $451.07 billion in the preceding fiscal year, while goods imports decreased to $677.24 billion from $715.97 billion over the same period. Global events like the Houthi attacks in the Red Sea, the Russia-Ukraine conflict impacting crude oil prices, US-China trade tensions, and proposed EU regulations all influenced India's trade dynamics in 2024.
"Going forward these sectors like electronic goods, mobile assembling, drugs and pharmaceuticals are expected to continue to do well," said Biswajit Dhar, Professor- Centre for Economic Studies and Planning, Jawaharlal Nehru University.
"However, what worries me is the threat of protectionism rising among the advanced economies. These economies are following an industrial policy, and are trying to strengthen their manufacturing base. Also, this form of protectionism doesn't only lead to higher tariffs but also different kinds of standards like labour standards, supply chain due diligence legislature, which can impact our exports going forward," Dhar added.
Despite the challenges, the WTO forecasts a gradual recovery in global merchandise trade volumes, with a projected increase of 2.6% in 2024 and 3.3% in 2025 as economic conditions improve. However, the global trade scenario witnessed a 1.2% decline in 2023 amidst geopolitical and economic uncertainties, contrasting with a 3% growth in 2022. Notably, while merchandise exports declined by 5% to $24.01 trillion in 2023, services exports rose by 9% to $7.54 trillion, partially offsetting the slump in goods trade.
Meanwhile, Indian exports remained steady to major markets like North America, Europe, and the West Asia-North Africa (WANA) region but witnessed declines in regions like ASEAN, South Asia, North East Asia, and Africa during FY24, according to commerce ministry data.
(Source: Live Mint)
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