The slump in global demand pulled India’s foreign trade down by 2.5 per cent to $800.9 billion during the first half of 2023 over the corresponding period last year, the latest data showed.

It showed that exports expanded 1.5 per cent to $385.4 billion and imports, down 5.9 per cent to $415.5 billion.

Shipments rose riding on services growing 17.7 per cent to $166.7 billion, masking the 8.1 per cent decline to $218.7 billion in merchandise exports. Data shows a decline due to weak global demand and losing competitiveness in labour-intensive sectors.

“India’s foreign trade (exports and imports of merchandise and services) reached $800.9 billion during January-June 2023, exhibiting a decline of 2.5 per cent from $821.2 billion over the same period last year (January-June 2022),” according to the analysis of the Global Trade Research Initiative (GTRI).

“Data shows a modest decline due to weak global demand and losing competitiveness in labour-intensive sectors.

“The decline in merchandise exports happened despite the appreciating rupee. INR/$ exchange rate appreciated from 76.16 in April 2022 to 82.18 in Apr 2023,” GTRI co-founder Ajay Srivastava said.

He said the world trade outlook for 2023 is weak due to several factors, including the ongoing war in Ukraine, high inflation, tighter monetary policy, and financial uncertainty.

“But these factors will soon be overshadowed by a spate of new subsidies and protectionist measures by the EU and the US. In the first seven months of 2023 alone, the EU has introduced five climate change and trade regulations, each of which are essentially measures to curb imports,” he said.