Godrej Consumer shares slide following warning on ‘subdued demand’, drag HUL, Nestle, Dabur4

• 30th January 2025
• Google

India’s goods exports in July 2024 declined 1.48 per cent (year-on-year) to $33.98 billion pulled down by sectors including petroleum products, gems and jewellery and chemicals as global demand continued to be affected by geo-political ncertainties and growing…

In July 2024, India’s merchandise exports declined by 1.5% to $33.98 billion, down from $35.20 billion in June. This marked the second consecutive month of declining goods exports, indicating sluggish global demand. Imports during the same period rose to $57.48 billion from $56.18 billion in June, leading to a merchandise trade deficit of $23.5 billion—the highest in nine months and exceeding economists’ expectations of $21.35 billion.

The widening trade deficit poses challenges to India’s economy and currency stability. In response, India is exploring new markets, such as Africa, and diversifying its export portfolio to mitigate setbacks in Western economies. Despite global challenges, India’s services exports remained stable at $28.43 billion in July. Notably, gold imports slightly increased to $3.13 billion, while oil imports decreased to $13.8 billion from June’s $15.05 billion, reflecting the impact of fluctuating crude oil prices on export dynamics.

The decline in exports and the rising trade deficit underscore the vulnerabilities associated with global economic integration. Factors such as changes in foreign monetary policies, especially those of the U.S. Federal Reserve, and global commodity price fluctuations significantly influence India’s trade dynamics. For instance, a stronger U.S. dollar can lead to capital outflows from India, affecting asset prices and increasing market volatility. Additionally, India’s dependence on crude oil imports makes it susceptible to global oil price changes, impacting the import bill and current account deficit.

To address these challenges, India is focusing on diversifying its export markets and products. The electronics sector, particularly mobile phone exports, has shown significant growth. Between April and December 2023, electronics exports exceeded $20 billion, with mobile phone exports—dominated by the iPhone—accounting for 52% of this figure. This diversification aims to reduce dependence on traditional markets and products, enhancing resilience against global economic fluctuations.

The widening trade deficit poses challenges to India’s economy and currency stability. In response, India is exploring new markets, such as Africa, and diversifying its export portfolio to mitigate setbacks in Western economies. Despite global challenges, India’s services exports remained stable at $28.43 billion in July. Notably, gold imports slightly increased to $3.13 billion, while oil imports decreased to $13.8 billion from June’s $15.05 billion, reflecting the impact of fluctuating crude oil prices on export dynamics.

The decline in exports and the rising trade deficit underscore the vulnerabilities associated with global economic integration. Factors such as changes in foreign monetary policies, especially those of the U.S. Federal Reserve, and global commodity price fluctuations significantly influence India’s trade dynamics. For instance, a stronger U.S. dollar can lead to capital outflows from India, affecting asset prices and increasing market volatility. Additionally, India’s dependence on crude oil imports makes it susceptible to global oil price changes, impacting the import bill and current account deficit.

To address these challenges, India is focusing on diversifying its export markets and products. The electronics sector, particularly mobile phone exports, has shown significant growth. Between April and December 2023, electronics exports exceeded $20 billion, with mobile phone exports—dominated by the iPhone—accounting for 52% of this figure. This diversification aims to reduce dependence on traditional markets and products, enhancing resilience against global economic fluctuations.