“Headwinds from a slowing global economy are beginning to weigh more on exports,” believes Rahul Bajoria, an economist from Barclays Plc. However, that doesn’t bode well for India, whose exports declined for four months straight. The exports registered a decline of 13.9% in March, while the imports decreased by 7.90% compared to the figures of last year. February 2023 exports amounted to $33.88 billion, which was 8.8% less than $37.15 billion in February 2022.
The decline in Indian exports is due to the global slowdown and inflation led by post-pandemic recovery and geopolitical tensions. Contrary to the overall trend, electronic exports surged by 57%, defining India’s increasing role as a goods and service provider in the IT industry. Moreover, Apple Inc. is expanding its manufacturing units and market in India. It currently makes 7% of iPhones in India and opened a second Apple store in New Delhi, creating 70 additional jobs after its flagship showroom in Mumbai.
Market Picture Shows Mixed Trend
Moreover, consumer activity gives a mixed picture and shows that India’s economy stays resilient in adverse times. Credit growth in the banking section continues at 15%, which is lower than 15.2% in February. Moreover, the market consumption increased in March, as indicated by a 13% rise in tax collections to amount to USD 19.5 billion ( Rs 1.60 trillion). While there was a decline in new vehicle registrations, passenger vehicle sales saw a 14.42% year-on-year surge. The manufacturing activities moderated, as shown by electricity consumption, which declined from 181 gigawatts to 170 gigawatts. The unemployment rate increased from 7.45% to 7.80% in a month as companies continued to slow down hiring, and layoffs became more common.
India Strides On
While all countries have been affected by the global slowdown in business activity, India has shown resilience. The mixed market sentiment, continued market activity, and less decline in imports indicate that Asia’s third-largest economy continues to strive at a fast pace of development. Moreover, the Indian government has been working with global figures to capitalise on the specks of hope and opportunities in an uncertain market.
Many nations and the Reserve Bank of India, India’s central bank, are discussing the possibility of using the Indian Rupee as the currency for foreign trade. This will help Indian companies to avoid transaction fees, and 18 countries, like Malaysia, the UK, and Russia have started using Special Vostro Rupee Accounts (SVRAs), which allows them to trade in Indian Rupee. The government has been working on making the business environment at home favourable to attract foreign investors and multinational companies. These efforts have been seen materialising into capital as companies from the US and Japan shift their attention to India.
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