India's merchandise imports are estimated to grow by about 16 per cent to $710 billion in this fiscal due to a jump in in-bound shipments of crude oil, coal, diamonds, chemicals and electronics, a report by economic think tank GTRI said on Wednesday.

The Global Trade Research Initiative (GTRI) also said the Indian economy will be moderately impacted by weak global demand and recession in the large economies.

Six product categories - petroleum, crude oil; coal, coke; diamond, precious metals; chemicals, pharma, rubber, plastics; electronics; and machinery - account for 82 per cent of India's total merchandise imports.

“India's merchandise imports for the fiscal year ending March 2023 are estimated to touch $710 billion, up from $613 billion in FY '2022, an increase of over 15.8 per cent over last year,” GTRI co-founder Ajay Srivastava said.

It said the estimated value of petroleum imports is $210 billion, which includes crude oil, LNG and LPG.

“Crude imports grew by 53 per cent over the last fiscal. India bought crude from diversified countries. The top suppliers are Iraq ($36 billion), Saudi Arabia ($31 billion), Russia ($21 billion), the UAE ($7 billion), and the US ($11.9 billion). Imports from Russia increased by 850 per cent over last year,” it added.

The country's coke and coal imports during 2022-23 are expected to touch $51 billion.

India imports both coking coal and thermal coal. While coking coal is used as a raw material for making steel, thermal coal is used to generate electricity.

It said coking coal imports may exceed $20.4 billion this fiscal, an 87 per cent increase over last year and steam coal imports may exceed $23.2 billion, a 105 per cent increase compared to last year.

Similarly, India's diamond imports are estimated at $27.3 billion this fiscal, most of which was exported and earned $24 billion for the country.

“India also exported most of the imported cut and polished diamonds. The reasons for such circular trading without adding value are not clear,” it added.

Further, it said chemicals, pharma, plastics, and rubber account for $98.2 billion or almost 13.8 per cent of India's imports.

Major imports are organic chemicals, including active pharma ingredients, fertilisers, and plastics.

"India imports 65-70 per cent of APIs from China. We must revive the API industry to ensure our country's health security. This will require focus on not the top or penultimate product, but the entire supply chain," Srivastava said, adding India must also remove any inverted duty conditions to set the plastics sector free.

Machinery, electronics, and telecom account for $135 billion or almost 20.4 per cent of India's imports.

Regarding steel, metals, ores, and minerals, the report said India must watch out for subsidised imports as China, Korea, and Japan have excess capacities, and exports to the EU would be restricted because of carbon border taxes.

India imports mainly from China, the UAE, the US, Saudi Arabia, Iraq, Russia, Indonesia, Singapore and South Korea.

“India has the highest deficit, with China exceeding $87.5 billion. China's 65 per cent of exports to India are in just three categories - electronics, machinery and organic chemicals. Other key import categories include plastics, fertilisers, medical, and scientific instruments,” it added.

The Commerce Ministry is expected to release the official figures for exports and imports for 2022-23 by mid-April.

During April-February 2022-23, imports rose to $653.47 billion as against $549.96 billion during April-February 2021-22.