data | Behind the numbers: outlook for the $400 billion export mark

In FY22, India’s exports surpassed $400 billion for the first time ever. However, the import bill also exceeded $600 billion. The steep rise in both numbers reflects rising commodity prices in international markets due to the pandemic and the Russia-Ukraine war. In fact, the surge in imports in FY22 widened the trade deficit to its highest level in two decades. The peak in exports achieved in FY22 was due to increases in the value of commodities rather than volume. This is illustrated when exports are expressed as a percentage of GDP (market prices). In FY22, despite the absolute peak, exports were relatively lower as a % of GDP than levels recorded in FY2014. Meanwhile, foreign exchange reserves were at a nine-month low in March 2022.

In absolute numbers

The chart shows India’s imports and exports in billions of dollars. While exports surpassed the $400 billion mark in FY22, imports also grew significantly, surpassing the $600 billion mark. The drastic increase in the value of imports and exports reflects high commodity prices due to COVID-19 and the Russia-Ukraine war.

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Widening trade deficit

The graph shows India’s trade balance (in billion dollars), ie the difference between exports and imports. While exports expanded, imports also increased significantly, widening the trade deficit to $193 billion, the highest in two decades.

Exports as a share of GDP

The chart shows India’s exports as a percentage of GDP (market prices). While exports in absolute terms peaked in FY22, as a percentage of GDP they are relatively lower than the peaks recorded in FY2012 and FY2014.

loosen reserves

Chart shows India’s foreign exchange reserves of US$618 billion for FY22. Foreign exchange reserves of US$618 billion as recorded in March 2022 were the lowest of the past nine months.

Source: CMIE

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