Government’s push for exports results in favorable trade balance

New Delhi, March 18 (IANS) The balance of trade has been favourable for India as exports stood at USD 73.55 billion while imports were at USD 75.50 billion in February 2024, narrowing the trade deficit to USD 1.95 billion, stated Amnish Aggarwal, Director of Research, Prabhudas Lilladher.

According to Aggarwal, the government’s focus on exporting manufactured goods under the PLI scheme, infrastructural development, and revival of service receipts have contributed to the positive trade balance. The range-bound movement in oil prices and the Indian Rupee has also helped in narrowing the import bill for the country.

The Foreign Trade Policy 2023 aims to target exports worth USD 2 trillion by 2030. India plans to achieve this by building alliances through preferential trade agreements and diversifying the global supply chain away from China, as per Aggarwal’s analysis. Emkay Global Financial Services noted that Q4 is likely to witness a current account surplus of 0.5 per cent of GDP, primarily due to better performance in goods and services exports.

It is highlighted that the current trend of regular downward revisions in CAD/GDP estimates has been driven by notable growth in net services exports, with software exports remaining strong and non-software exports expected to surge by over 50 per cent YoY. This positive performance has led to the expectation of a current account surplus in Q4 for the first time since Q1FY22, as per Emkay Global Financial Services.