During the April-December period of FY2022-23, the Netherlands overtook the United States and the United Arab Emirates as India's third-largest export destination. The increase in shipments of petroleum products, electronic items, chemicals, and aluminium goods has been attributed to the increase in trade between India and the Netherlands.
According to commerce ministry data, the country's trade surplus with the Netherlands has increased from $1.5 billion in 2017 to $12.3 billion in 2022-23. According to commerce ministry data, India's top ten trade partners from April to December 2022-23 were the United States, the United Arab Emirates, the Netherlands, China, Bangladesh, Singapore, Brazil, the United Kingdom, Saudi Arabia, and Indonesia.
In 2020-21, the Netherlands was India's fifth-largest export destination. This year, the European country surpassed the United Kingdom, Hong Kong, Bangladesh, and Germany to become India's third major export hub. During the April-December period, India's exports to the United States increased by 8.54% to $53.1 billion, up from $48.9 billion in the same period last year. India's exports to the UAE increased by 19.32% to $20.8 billion in comparison to 17.4 billion in the same period last year.
India's total exports (merchandise and services combined) increased by 16.11% from April to December 2022 compared to the same period last year (April-December 2021). In terms of value, India's total exports in April-December 2022 were $568.57 billion, while imports were $686.70 billion.
As India's domestic demand remained stable despite the global downturn, total imports in April-December 2022 increased by 25.55% over the same period last year. However, in December 2022, merchandise and services exports totaled $61.82 billion, a 5.26% decrease from the same period the previous year. Overall imports in December 2022 were $73.80 billion, a 1.95% decrease from the same period the previous year.
The country's trade deficit has already reached a historic high of 6% of GDP in the first three quarters of FY23 (deficit of $118 billion or 9.4 lakh crore @80 in the GDP of 157.6 lakh crore). The trade deficit is expected to be much higher for the entire fiscal year of FY23, putting tremendous pressure on the forex reserves.
As per Federation of Indian Export Organisations (FIEO) president A Sakthivel, the coming months would be quite challenging unless both global economic growth and the geopolitical situation improve drastically. However, the decrease in imports is a good sign, he said, which will put less burden on the trade deficit front. "We hope that the energy prices will come down further to provide more relief," he added.