China, the U.A.E. and the U.S. are India’s top import source nations in FY23. Russia holds the fourth position among India’s top 10 merchandise import destinations, as imports from the country grew five times during the financial year, according to data from the Ministry of Commerce. Imports from Russia grew from $9.87 billion in FY22 to $46.33 billion in FY23. While China retained the top spot as India’s biggest import source nation, the pace of growth seemed to taper downwards on account of India diversifying its shopping destinations. Russia’s rise to the 4th spot marks a significant development for this year, according to Professor Saon Ray of the Indian Council for Research on International Economic Relations. Sunflower oil and coal were India’s top buys from Russia last year, she said. The rise in FY23 was also on account of rising petroleum and fertiliser imports as Russia supplanted Ukraine’s position, said Ray.
The Commerce Ministry data reveals that a major chunk of the demand for fertilisers has shifted towards Russia, where the import share has increased from 5.2% in 2021-2022 (April-February) to 17.2% in 2022-2023 (April-February). Chinese fertilizer imports fell from 21.9% over the same span in 2021-2022 to 13.9% in 2022-2023, accounting for a decline in imports of around half a billion from China.
During a trade briefing on Thursday, the Commerce Ministry said that India’s imports for electronic goods has shifted to other markets like Singapore, South Korea and Vietnam, which led to a decline in imports of electronic goods from China. The decline is pegged at around $2 billion in 2022-2023 (April to February), as compared with the same period in the previous year. In percentage terms, Chinese import share in electronic goods has also declined from 48.1% in 2021-2022 (April-February) to 41.9% in 2022-2023. India’s reduced import dependence on China also signals the rising manufacturing capacity within the country, on account of production-linked incentives, according to an official with knowledge of the matter, who spoke on condition of anonymity.
Commodities Fineprint
India’s overall trade export estimates stood at $770.1 billion, exceeding $20 billion from the target figure, with services leading the overall export growth.
Ray said that there is a rise in the export share of electronic goods. “The bad news is the decline in the share of engineering goods, which is particularly worrisome, and gems and jewellery,” she said. In terms of commodities, export of electronic goods rose from $15.66 billion to $23.57 billion in FY23 Export share of engineering goods showed a decline from $112.16 billion to $107.04 billion over FY23 fiscal year. Gems and jewellery, in absolute terms, declined from $39.1 billion to $37.9 billion in FY23. A look at export destinations shows that the U.S., with 17.5% share, retains the top spot for Indian exports. An outlier this year has been the Netherlands. It has emerged as the third biggest export destination, capturing a 4.67% share in the total exports in fiscal 2023.
In absolute terms, exports to Netherlands grew from $12.5 billion in FY22 to $20.9 billion in FY23, indicating 66.6% growth. China and Bangladesh’s share among India’s export destinations also fell to 3.42% and 2.61%, respectively.
