Trade deficit has widened to $266.78 billion in 2022-23, rising 39.6 per cent from a year earlier, data released on Thursday showed.

Merchandise exports rose 6 per cent year-on-year to $447.46 billion, while imports jumped 16.5 per cent to $714.24 billion, according to the commerce ministry.

Economists said the jump in shipments was largely because of the export of petroleum products and if they are not counted, exports would show contraction.

The data showed that discounted Russian crude prices have resulted in substantial increase in its share as it went up to 6.49 per cent in FY22 from its earlier 1.61 per cent in FY21.

Aditi Nayar, chief economist of Icra, said: “Although India’s merchandise exports hit a record $447.5 billion in FY2023, non-oil exports declined marginally by 0.5 per cent following the slackening external demand owing to the global slowdown in H2 FY2023 as well as the moderation in global commodity prices.

“These concerns are set to exacerbate in FY2024 and are expected to lead to a deeper contraction in merchandise exports. This will weigh on the performance of the manufacturing sector and act as a drag on GDP growth.”

“While imports are expected to contract in FY2024, after rising 16.5 per cent to $714.2 billion in FY2023, the extent of the contraction would be limited as India’s domestic demand is expected to outperform external demand,” she added.

Commerce secretary Sunil Barthwal said “based on services exports estimates and actual numbe