Exporters expect a growth of 11-13% in FY24. Cotton textile and apparel exporters expect 8-10% on-year growth in FY24. India clocked $450 billion exports in FY23.
Exporters expect business to resume fully after July, pinning their optimism on recovery in the advanced markets and improved order book.
“We expect $900 billion exports for the full year, of which $500-510 billion would be goods and around $400 billion services,” said Ajay Sahai, director general, Federation of Indian Export Organisations (FIEO), adding that the first and second quarters of the calendar year would be slow for exports.
Exporters said many clients had deferred their shipments from the last fiscal to this financial year and those orders will start flowing soon.
Sahai said the volume of orders is lower but the frequency is higher. “By September, we will push orders for Christmas and new year,” he said.EEPC India chairman Arun Kumar Garodia said the Russia-Ukraine crisis, slowdown in advanced economies, high interest rates and geopolitical tensions will continue to adversely impact trade. “The order book will improve from July. We expect to end the full year with growth higher than last year,” he said.Strategy under works
India’s goods exports shrank 12.7% on-year to $34.66 billion in the first month of FY24, dragged by sluggish demand and recession in major markets while the trade deficit fell to a 20-month low at $15.2 billion in April.
“Looking at the uncertainty, the government has not fixed any export target for the current fiscal and would only forecast, but exporters and industry were asked to give their own targets,” an official said, adding that an overall strategy both for goods and services exports was needed.
The commerce and industry ministry has held a round of talks with services exporters to formulate short-term, mid-term and long-term strategies.
The share of India’s services exports in overall global services exports has risen from 4% to 4.4%, said World Trade Organization.
Sectoral Outlook
Cotton textile and apparel exporters expect 8-10% on-year growth in FY24 after a slow first quarter.
“April was sluggish in terms of demand. There is not much demand internationally. We expect some pick up and exports to increase 8-10% over the last fiscal,” said a representative of the cotton textile industry.
Around 70% of India’s cotton textiles go to the US and the EU but demand is down almost 10% on the retail side, especially home textiles while readymade garments’ demand is down 10-12% over last year.
“Commodity prices have fallen, which impacted exports. However, gas prices in the EU and inflation are stabilising. This will help push demand for discretionary spends,” said a representative from the synthetic textile industry.
Exports of processed foods are likely to rise 6-7% this year.