Bl interview. Indian exports may grow at 3-4% in CY 2023: FIEO Director General

The slowdown in global trade due to moderate demand, on account of high inflation and rising interest rates, has primarily affected our exports. The WTO has slashed the global trade forecast for 2023 to 0.8 per cent . Decline in commodity prices including petroleum and metals have also affected value wise exports of the country. The restriction on exports of non basmati rice, wheat, sugar and certain other commodities pulled down our agri export which was showing sustained growth from pre-Covid period. 

We expect to end calendar year (CY) 2023 with goods and services exports of about $785 -790 billion, posting a growth of about 3-4 per cent. Given the headwinds in global trade, geo-political uncertainties and performance of other competing countries, such growth is encouraging. Imports are also likely to be moderate at $845-850 billion in CY 2023 against imports of $904 billion the previous year. Trade deficit is not much cause of concern as it is expected to be reduced by half, from $141 billion in CY 2022 to $65 -70 billion in CY 2023. This will also help in moderation of the current account deficit.

The WTO revised forecast, released in early October 2023, has not factored Israel-Hamas conflict and piracy in the Red Sea, which have added to uncertainties as we enter 2024. However, global trade will be much more buoyant in 2024 since inflation is moderating globally and after a pause in the key rates by most of the central banks, interest rates are likely to move southward thus pushing demand. The pent-up demand in 2022 has slowed down exports in 2023 as offtake of inventory was low because of less purchasing power owing to rising inflation . However, with inventory bottoming out, new orders with large volumes are expected in 2024 thus pushing exports.