Contracting for the second month in a row, India’s exports dipped 6.58 per cent to $32.91 billion in January because of a slowdown in global demand, even as trade deficit touched a 12-month low of $17.75 billion during the month, according to official data released on Wednesday. Imports in January also contracted 3.63 per cent, the second consecutive month, to $50.66 billion.

Cumulatively, however, during April-January 2022- 23, the country’s merchandise exports rose 8.51 per cent to $369.25 billion, while imports increased 21.89 per cent to $602.20 billion, the data showed. The merchandise trade deficit for the April-January this fiscal stood at about $233 billion.

The country’s exports had contracted by 12.2 per cent to $34.48 billion in December 2022. It was in January 2022 when the trade deficit last touched $17.42 billion. Export sectors that recorded negative growth during the 10-months period of this fiscal include engineering goods, iron ore, plastic and linoleum, gems and jewellery. Engineering expor ts dipped by 3.37 per cent to $88.27 billion during April-January 2022-23.

In the same period, gems and jewellery shipments declined by 0.54 per cent to $31.61 billion. Sectors which recorded positive growth include petroleum products, electronic goods, rice, ready-made garments of textiles and chemicals. “The overall exports (goods and services) growth in the current financial year is about 17.33 per cent. The main engine behind this export growth is the services sector, which has been growing at a historically high growth rate of about 30 per cent.

“Merchandise exports are also cumulatively growing at 8.5 per cent. We are optimistic that this growth momentum would continue despite strong global headwinds,” commerce secretary Sunil Barthwal told reporters. Trade deficit slumped to a year low of $17.75 billion in January as both inbound and outbound shipments fell for the second consecutive month.

A. Sakthivel, president, FIEO said: “The coming months are going to be a little challenging unless both global economic growth and the geopolitical situation improves drastically. However, we will be on course to cross the previous year’s export target quite easily, touching almost $440-445 billion with a growth of over 4-5 percent this fiscal.”