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Robust orders, FTAs to drive exports - The Sunday Guardian Live

Robust orders, FTAs to drive exports - The Sunday Guardian Live
NEW DELHI: Improved demand coming in from the European Union, UK, West Asia and the US, which has given an order boost to exporters with over 10 per cent

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India's exports are expected to see a significant boost in the new fiscal year, with a 9.10% year-on-year growth in merchandise exports in May 2024. This growth is largely driven by increased demand from the European Union, UK, West Asia, and the US. The total exports, combining merchandise and services, also grew by 10.25% in May 2024. However, a 7.7% month-on-month growth in imports during the same period has led to a trade deficit of USD 23.78 billion, which is a cause for concern.

The positive outlook for global trade, combined with India's focus on Free Trade Agreements (FTAs) and Production-Linked Incentive (PLI) schemes, is expected to further boost India's merchandise exports. However, ongoing geopolitical tensions, including the Russia-Ukraine war and the Red Sea crisis, have made the international trade scenario tougher for Indian exporters.

On a sectoral basis, non-petroleum and non-gems and jewellery exports, as well as exports of gold, silver, precious metals, petroleum products, engineering goods, electronic goods, drugs and pharmaceuticals, ready-made garments, and plastic and linoleum, have all seen significant increases. However, the rise in net oil imports has widened the merchandise trade deficit, leading to concerns about the current account deficit (CAD).

Despite the trade deficit, experts believe that the forecast of an uptick in global trade volume this year over last will keep the CAD in check. Additionally, the implementation of FTAs and continued government support for the manufacturing and export sectors are expected to further boost India's exports in the ongoing fiscal year.