### Summary
India's total exports and imports of goods and services surpassed $800 billion in the first half of 2023, with a healthy growth in the services sector offsetting a slowdown in global demand.
### Facts
- 📈 Exports of goods and services rose by 1.5% to $385.4 billion in January-June 2023 compared to the same period in 2022.
- 📉 Imports declined by 5.9% to $415.5 billion during the first half of 2023, compared to January-June 2022.
- 💵 Standalone goods exports dropped by 8.1% to $218.7 billion, while imports contracted by 8.3% to $325.7 billion.
- 💼 Services exports grew by 17.7% to $166.7 billion, while imports rose by 3.7% to $89.8 billion during the six-month period.
- 💰 The depreciation of the Indian Rupee didn't prevent the decline in merchandise exports, and weak global demand and loss of competitiveness in labor-intensive sectors contributed to the modest decline.
- 🌍 Several factors, including conflicts, inflation, monetary policies, and financial uncertainty, are expected to weaken world trade in 2023.
- 🛡️ India should focus on increasing product quality and supply chain competitiveness, retain policy space in free trade agreements and Indo-Pacific Economic Framework for Prosperity (IPEF), and be prepared to respond to unilateral policy decisions.
- 📊 Among the product categories contributing to India's exports, 11 out of 29 registered positive export growth, while 18 declined during January-June 2023.
- 📱 Smartphone exports surged to $7.5 billion in the first half of 2023, up from $2.5 billion in the same period in 2022.
- 🌐 India's exports declined in 134 of the 240 countries it exports goods to, with major declines observed in the USA, UAE, China, Bangladesh, and Germany.
- 🌐 India's export promotion should focus on the 41 countries where its exports exceed $1 billion, accounting for 87% of its exports.
- 👥 The top 15 countries with which India has the highest trade deficit include China, Russia, Saudi Arabia, Iraq, and Switzerland.
- 📉 The share of free trade agreement partners in India's merchandise exports decreased from 30.1% in the first half of 2022 to 26.8% in 2023.
- ⛽ Import of crude petroleum declined by 7.6% to $73.2 billion in January-June 2023, with Russia's share in India's import of petroleum crude increasing significantly.
- 🌍 Import growth from major suppliers like Iraq, Saudi Arabia, and the UAE declined during this period.
India has seen an increase in its tariffs and trade policy measures in recent years, reversing the trend towards liberalization and increasing trade restrictions, which is a global phenomenon as many countries are adopting industrial policies to promote domestic production and exports; however, the effectiveness of these policies and their impact on economic growth and job creation remain to be seen.
The U.S. trade deficit decreased by 10% in August, reaching a nearly three-year low, which could potentially indicate a change in consumer spending habits and emerging economic weakness. However, smaller deficits contribute positively to GDP growth, and the declining trade gap may boost the third-quarter GDP by 4% or more.
