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India’s merchandise trade crosses $1tn amid high commodity prices

India’s merchandise trade crosses $1tn amid high commodity prices

India has reportedly recorded a sharp rise in foreign trade of merchandise goods as exports grew by 44.6%, to $422 billion, and imports grew by 55.3%, to $613 billion.

The total trade value crossed the $1 trillion mark for the first time, despite various challenges such as delays at ports, shortage of containers, and interruptions in supply chains.

However, with higher imports than exports, there was also a drop in the country’s trade balance, tipping past the 2012-13 peak by a small margin, which was caused by a rise in import costs of petroleum crude and gold.

In the financial year 2022, the rise in imports and exports was driven by a steep increase in commodity prices amid soaring demand as economies worldwide recovered from pandemic-led lockdowns.

According to the trade data released by India’s commerce ministry, the country exported to 240 nations and jurisdictions, while imported from 229 in 2021-22. Its trading partners, China and the U.S. recorded significant trade flows, accounting for more than a fifth of India’s external merchandise trade.

The U.S. saw around a 50% increase on-year in exports and imports from India, while China saw around a 45% increase, with exports being relatively low.

Amongst its other trading partners, Australia recorded the sharpest growth in bilateral goods trade as both imports and exports doubled in FY22. However, the country only makes for 2.4% of the value of the traded goods between the two.

There was a sharp rise in India’s imports from oil-exporting nations amid surged prices of crude petroleum. While the imports in Saudi Arabia, Oman, Kuwait, and Iraq more than doubled , Qatar and the United Arab Emirates saw a 70% growth.

India’s trade deficit also surged by almost 85.8% to $190 billion in the year, with China recording the highest, around $72.9 billion—40% of India’s total trade deficit for 2021-22. Meanwhile, the trade deficit from the six oil-exporting nations made up almost half of the total deficit.

The country’s current account deficit is estimated to rise further, over $40 billion in the year, due to the surge in the merchandise trade deficit.

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Omkar Patwardhan

Omkar Patwardhan started his professional career in the hospitality industry. Having nurtured a deep-sated passion for words however, he found his way into content writing and now pens down articles for numerous websites, including News Origins, spanning the sectors of business, finance, and technology.