Imports dip from three out of top 10 suppliers
NEW DELHI: India’s merchandise imports from three out of top 10 trade partners contracted yearon-year in October – about 10% from China at $7.8 billion, nearly 5% with the US to $3.5 billion and 31% from Australia at $1.3 billion – although inbound shipments from Russia surged over 441% at over $3.8 billion, mainly due to energy imports.
Experts said imports were down from key destinations are due to two reasons -- price corrections of raw materials sourced from these countries, and worldwide demand contraction due to global headwinds such as supply chain disruptions because of geopolitical reasons, high inflation and rising interest rates.
Rise of import value from Russia was because of cheaper crude oil purchase in large quantities as India needs energy at an affordable rate to fuel its growth, they said. India’s top 10 merchandise import origins are China ($7.8 billion), the United Arab Emirates ($3.9 billion), the US ($3.5 billion), Saudi Arabia ($2.7 billion), Russia ($3.8 billion), Iraq ($2.6 billion), Indonesia ($2.3 billion), Singapore ($1.97 billion), South Korea ($1.6 billion) and Australia ($1.3 billion), according to official data for October 2022 overseas trade.
“Slowdown in imports from the US, Australia and China is attributed to the deceleration in economic growth rates in these economies, along with major price corrections in the international commodity prices. As we import majorly in the industrial raw materials from Australia, the US and China, so price corrections in these items are impacting the year-on-year growth in imports,” said Saket Dalmia, president of PHD Chamber of Commerce and Industry (PHDCCI).
The GDP growth rate in the US is decelerating from 5.6% in 2021 to an expected 1.6% in 2022 and 0.9% in 2023. The GDP growth rate in China is decelerating from 8% in 2021 to a projected 3.2% in 2022 and 4.4% in 2023. In Australia, GDP growth rate is decelerating from 4.9% in 2021 to an anticipated 3.7% in 2022 and 1.9% in 2023. So, slowing economic growth rates have impacted demand and lower prices in commodity prices, he said.
“Also, India’s growth rate is decelerating from 8.8% in 2021-22 to less than 7% in 2022-23, as per various projections,” Dalmia said. “So, this has also impacted the demand trajectory for the international commodities and other imports.”
India, one of the fastest growing economies, grew 13.5% in the first quarter of 2022-23, but growth in the second quarter was 6.3%. Reacting to the latest GDP numbers on November 30, chief economic advsior V Anantha Nageswaran said the Indian economy is on track to achieve a 6.8-7% growth in 2022-23 financial year.
Experts, however, say the decline in imports may continue with slowing down of major economies. “The current recessionary situation is seeing a dip in volumes worldwide both in inbound and outbound trades,” said Munish Sabharwal, managing director, transaction and preinvestment advisory, market research and greenfield at Nexdigm, a consultancy firm.
On rising imports from Russia, experts said it was prudent to purchase cheaper Russian crude oil instead of relying on producers’ cartel OPEC+, which is resorting to supply cuts to keep oil prices high.