The country's merchandise exports are expected to reach $450 billion by the end of this fiscal year despite geo-political challenges including the Red Sea crisis, said Ashwani Kumar, the newly elected president, apex exporters body Federation of Indian Export Organisation (FIEO). The need of the hour is to address the Red Sea crisis challenges by ensuring the availability of marine insurance and a rational increase in freight charges, he added.

Kumar said the exporting sector, particularly MSMEs, needs easy and low-cost credit, and marketing support to boost the country's exports, adding early conclusion of free trade agreements such as with the UK and Oman will also help push the outbound shipments. MSMEs will play a important role in achieving the $ 1 trillion goods export target by 2030, according to Kumar.

During April-February 2023-24, exports reached $395 billion. "This was an impressive increase despite the Red Sea crisis, tight monetary stance by the developed world and falling commodity prices. This reflects the resilience of the exporting community, who have continuously been braving such odds since the Russia-Ukraine war," he said.

The main drivers of merchandise export growth in February include engineering goods, electronic goods, organic and inorganic chemicals, drugs and pharmaceuticals, and petroleum products.

India’s merchandise trade deficit widened to $ 18.71 billion in February from $17.49 billion in the previous month, according to government data, as imports outpaced exports in value terms against the backdrop of the Red Sea conflict.

Goods imports rose to $ 60.11 billion in February against $ 54.41 billion in January, commerce ministry data showed while exports came in at $ 41.40 billion in February, up from $ 36.92 billion in January.

On a year-on-year basis, exports of goods rose 11.86 per cent in February, up from $ 37.01 billion in February 2023, while imports rose 12 per cent. Trade deficit is the difference between a country's imports and exports.

"Many of the world's largest economies held up reasonably well considering the sheer breadth of the headwinds they faced in the last two years, including high interest rates, the stress in interest rate-sensitive and energy-intensive industries, volatile commodity prices, fiscal consolidation, a strong dollar and conflicts in places integral to the global economy," said rating agency Moodys in its latest global macroeconomic outlook report. "We expect a steady normalisation in economic activity through this year (CY2024) and next (CY2025) across advanced and emerging market countries," added Moodys.