Will services once again come to the rescue of exports?
In FY23, services exports saved the day for us even as a global slowdown impacted goods exports in the latter part of the fiscal. In this episode, we take a look at how trade shaped up in FY23 and how this fiscal has begun.
In the year ended March 2023, merchandise exports grew 6.9%. However, this was after figures for March were revised sharply higher, with exports crossing the $40-billion mark in that month for only the second time in the year.
As per initial estimates, export growth was predominantly driven by petroleum products and electronics, which each grew about 40%. These sectors had some support from rice exports that grew about 15%.
Experts say they believe the government’s production-linked incentive (PLI) scheme has helped spur investments into electronics manufacturing in the country.
Bad news on export shrinkage came from cotton (-28%), iron ore (-44.6%), plastics and engineering goods.
Services ‘served’ (pun intended) us well in FY23, aided by the IT sector that had had a good run through much of the fiscal year ended March 2023. As per initial estimates, overall services exports grew about 30% to $323 billion. (Contrast this with goods exports growth at 6.9%).
Interestingly, the category called ‘Other Business Services’ showed significant growth in FY23. Growth here has been led predominantly by Professional & Management Consulting Services (PMCS).
What do the future months hold for us?
Script and presentation: K. Bharat Kumar
Videography: Bijoy Ghosh and Siddharth MC
Production: Shibu Narayan