The impact of an incipient recession in the west on India’s foreign trade has become unmistakable. Merchandise exports shrank 12.2 per cent in December 2022 from a year before to $34.5 billion, the second contraction in three months, owing to a slowdown in demand from key markets in the wake of aggressive rate hikes by major central banks and unfavourable base. Goods exports had contracted by 16.65 per cent on year in October, while a flat growth was reported in November.
Imports, too, dropped in December, albeit at a slower pace of 3.5 per cent, to $58.2 billion, reflecting the impact of subdued domestic goods consumption in recent months. Plus, easing global commodity prices have impacted both exports and imports in value terms. Higher imports led to a rise in trade deficit to almost $23.8 billion in December from $22.6 billion in the previous month, although it’s still way below July’s record level of $30 billion.
India’s…
