Trade Growth In January Weathers Red Sea Turmoil, Bilateral Talks Inch Ahead
Merchandise exports stood at $36.9 billion in January.
The pace of trade growth in January has weathered shocks arising from the Red Sea crisis, according to data from the Ministry of Commerce and Industry.
Due to seasonal tendencies, exports fell 4% and imports declined 6% sequentially, belying expectations of a steeper fall on the back of the maritime impact from the prolonged Red Sea turmoil. This is also reflected in the trade deficit narrowing to a nine-month low of $17.5 billion in January.
"Despite the Red Sea crisis, recession in advanced economies and a fall in commodity prices, we have been able to achieve positive export growth in merchandise trade," Commerce Secretary Sunil Barthwal told reporters in New Delhi on Thursday.
Merchandise exports stood at $36.9 billion in January. In December, it was $38.5 billion. However, the exact quantum of impact due to the Red Sea crisis remains unknown.
It is possible that the export growth could have been higher without the Red Sea situation, but, despite the crisis, the growth in exports has sustained, according to an official with knowledge of the matter who spoke on the condition of anonymity.
"Monthwise exports also have certain cycles," Barthwal said, explaining the seasonality. "Sometimes the demand for goods is much more, sometimes there is an agriculture production cycle linked to it and sometimes it is festivals that are linked to it."
In terms of commodities, merchandise export growth in January was led by petroleum products, engineering goods, iron ore, electronic goods, drugs and pharmaceuticals.
Provisional figures indicate that petroleum exports contributed $8.2 billion, engineering goods added $8.7 billion, iron ore stood at $584 billion and drugs and pharmaceuticals at $2.13 billion.
Trade Talks Move Forward
The seventh round of negotiations on the free trade agreement between India and the European Union is expected to be held from Feb. 19 to 23 in New Delhi.
In the previous rounds, discussions on 18 policy areas were held in 71 technical sessions, the ministry said in a presentation.
In January, the EU chief negotiator was in New Delhi, and "we had extensive discussions on the services and investment channel till Jan. 19," a ministry spokesperson said.
Trade talks between India and the United Kingdom continue to progress at higher levels as the bilateral delegations iron out differences.
India also recently concluded the sixth round of its trade talks with Peru. A seventh round with Peru is expected to be held in New Delhi in April. Both sides expect to close major outstanding issues and endeavour to share the request list and offer list on services and goods, respectively, with each other, the ministry said.
