Balance of trade favourable with government`s impetus for exports
The balance of trade has been favourable with the government’s impetus for exporting manufactured goods under the Production Linked Incentives (PLI) scheme, building infrastructural facilities amid easing of global commodity prices, besides revival of service receipts, said Amnish Aggarwal, Director of Research, Prabhudas Lilladher.
Further, range-bound movement in oil prices (USD81-83/bbl) and Indian Rupee (Rs 82/USD) narrowed the import bill for India.
India’s exports stood at USD 73.55 billion (14.20 per cent YoY) while imports stood at USD 75.50 billion (10.13 per cent YoY) in February 2024, narrowing the trade deficit to USD 1.95 billion in February 2024 vs USD 4.15 billion in February 2023, he said.
“Going forward, the Foreign Trade Policy 2023 aims to target exports worth USD 2 trillion by 2030. The same is likely to be helped by India’s focus on building alliances through preferential trade agreements with world economies besides global supply chain diversifying away from China,” he added.
Emkay Global Financial Services said in a note that while Q3FY24 CAD/GDP likely widened to 1.7 per cent, Q4 is likely to see a current account surplus of 0.5 per cent of GDP (for the first time since Q1FY22), largely due to better-than-expected performance for both goods and services exports. This has been an ongoing trend throughout the year, leading to regular downward revisions in CAD/GDP estimates. Net services exports are especially notable, with software exports holding up well and net non-software exports likely to surge by over 50 per cent YoY.
