Merchandise exports may surge to $118 bn in final quarter of fiscal

Total merchandise exports in the January-March quarter are expected to grow about 3% year-on-year to $118.2 billion, an India Exim Bank forecast said. 

Non-oil exports are expected to grow 4.55% year-on-year to $95 billion during the period, Exim Bank said.

Overall, India’s total merchandise exports for FY24 are expected to grow to $435.3 billion, with non-oil exports likely to stay at the same level as last year. 

Oil exports are expected to remain subdued though, contracting by $12.5 billion when compared with the past fiscal year, it added.

The positive growth in the final quarter of the fiscal comes against the backdrop of consecutive declines seen in the first two quarters of the fiscal, the bank said, based on a projection by its research and analysis unit.

“Positive growth in India’s exports could be as a result of India’s strong GDP growth fundamentals and outlook and expected global easing of monetary tightening spurring global demand,” the report said. 

The outlook is, however, subject to certain risks, such as uncertain prospects for advanced economies, geopolitical shocks, the ongoing crisis in the Middle East, the Red Sea shipping lane disruptions, and deepening geo-economic fragmentation, the report said. 

Exim Bank uses an in-house model to generate an export leading index (ELI) for India to track and forecast the movement in India’s exports every quarter. 

The ELI gauges the outlook for the country’s exports and is essentially developed as a leading indicator to forecast growth in total merchandise and non-oil exports of the country. 

This quarter’s forecast results were reviewed by a committee of domain experts.