New Delhi, January 19
India’s exports are likely to fall by 2.9% in 2022-23 and further by 4.1% in 2023-24 to $416.6 billion. The exports had grown by 45.1% in 2021-22 mainly due to a sharp rise in commodity prices.
“Fears of an impending recession in the US and other developed economies led to a correction in commodity prices in the September 2022 quarter in addition to slowing demand. According to the World Economic Outlook (WEO), increase in commodity prices is likely to have decelerated to 7.3% during 2022. Slowing economic growth in China also hit demand for India’s exports,” said an analysis by the Centre for Monitoring Indian Economy.
International prices of metals including steel, copper, aluminium, zinc, lead and tin dropped to a 2-year low by November 2022. Yet, they remain above the pre-Covid levels. Cotton prices have also seen a similar trend. Petroleum product prices have also eased to six-month low in November, driven by a sustained easing of crude oil prices, said the report written by Janaki Samant.
Government policy has also hit exports. In May 2022, the government imposed export duty on pig iron, steel and iron pellets and sharply hiked tax on export of iron ores and concentrates in order to increase domestic availability. Consequently, exports of these commodities dropped sharply.
Slowing growth in China to hit demand
- n ears of an impending recession in the US and other developed economies led to a correction in commodity prices in the September 2022 quarter besides slowing demand
- According to the World Economic Outlook, increase in commodity prices is likely to have decelerated to 7.3% during 2022
- Slowing growth in China also hit demand for India’s exports
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