India exports see unexpected growth amidst weakening global economy

Tue 18 Oct 2022
Posted by: Phillip Adnett
Trade News

Indian Economy

Indian exports saw unexpected growth in September, despite fears of a worsening outlook for international trade, according to new statistics from the Indian government.

According to data released by India’s commerce department at the end of last week, Indian exports grew 4.8% year-on-year in September.

Mint reports that the growth was driven by the trade of chemicals, pharmaceuticals, electronic goods, amongst others.

Surprise

Preliminary trade data – released 10 days ago – had pointed to a 3.5% contraction, according to Business Standard.

The trade deficit nearly doubled in the first half of the Indian fiscal year (April-September), rising to $148.5 billion from $76.3 billion.

Tough conditions

The president of the Federation of Indian Export Organisations (FIEO), A Sakthivel, said:

“The slowdown in exports is a reflection of the toughening conditions of the global trade which is facing demand slowdown on account of high inventories, rising inflation, economies entering recession, high volatility in currencies and geopolitical tensions.”

Business intelligence company ICIS warns that Indian industries still face challenges in the second half of the financial year, highlighting a weakening demand for goods globally.

Reuters reports that analysts expect the Indian rupee to continue to decline this year, in spite of intervention from the central bank to stabilise the currency.

Trade deal

As reported by the IOE&IT Daily Update yesterday, the trade deal between the UK and India is expected to miss the 24 October deadline that former prime minister Boris Johnson set earlier this year.

Professor Sangeeta Khorana, chair of the IOE&IT’s academic board, told the Daily Express there had been “very good momentum” in the talks.

“It makes a lot of sense to have an agreement between both partners on a deadline, which obviously could move a few weeks here and there. You cannot set it in stone. But given the pace of negotiations, I think we are moving in the right direction,” Khorana said.

She added: “I think there's a lot of momentum now on the Indian side to do deals. Probably, because the benefits of bilateral trade deals have been showcased by the benefits such agreements bring.”

China

China, another major Asian economy, has postponed the release of economic data as President Xi Jinping seeks a third term in office at this week’s party conference, according to the BBC.

China had previously indicated that it could miss its annual economic growth target of 5.5%, and the delay in was seen as a sign of weakness in the Chinese economy.