The Ministry of Commerce said that green shoots are expected to sustain, offering hope that historical growth in the last quarter will place trade in good stead for the fiscal.
The comments come amid India's trade deficit narrowing in November, as imports saw a sharp fall on a sequential basis. The trade gap was $20.6 billion last month as compared with $31.46 billion in October.
The country was holding its own despite a global slump in trade, the Ministry said on Friday. November showed a positive trend even as commodity prices fell, it said.
"Despite interest rates not softening, global trade slowing down and global conflict aggravating, if you look at the world and our figures, we have done very well," Commerce Secretary Sunil Barthwal said at a media briefing in New Delhi.
Barthwal is optimistic about crossing last fiscal's figures, but the Ministry is also closely watching the global situation.
Growth in the January–March period, which has historically been the highest quarter—except in FY20—is also expected to improve the annual trade picture, the Ministry said.
"The green shoots, which have commenced in the last couple of months along with the new export orders, should be able to sustain and reach decent levels in (the) current financial year," Additional Secretary L Satya Srinivas said.
The challenges include tighter monetary conditions and recession in some parts of the world; geopolitical conflict disrupting the value chain; and vulnerabilities in South Asian countries like Bangladesh and Sri Lanka, where a currency crisis and domestic issues have had a bearing on Indian exports.
Regarding imports, monthly trends show that commodities such as gold have corrected from their October highs and are showing comparatively muted demand, similar to trends seen before October.
Petroleum crude has shown a decline, both in terms of exports and imports, due to a commodity price reduction, according to data.
The sharp correction in the November trade deficit comes after a super-normally high trade deficit in October, according to Madhavi Arora, lead economist at Emkay Global Financial Services Ltd.
"Imports behaviour in October (is) a bit idiosyncratic and was reflective of the festive and marriage season import demand for gold and consumer durable goods, which was likely to correct," Arora said.
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