Record Growth in India’s Imports from UAE, South Africa, and Switzerland in November
India’s commerce department reveals that India’s merchandise exports declined substantially by 4.9% in November. As per the recent report, this decrease was attributable to lower exports to the United States, the Netherlands, China, and Bangladesh. Prices of products such as lower petroleum products were responsible for reduced exports to the Netherlands while Chinese socio-economic problems and political instability in Bangladesh worsened the situation.
At the same time, merchandise imports reached record levels, reaching $70 billion during the same period; imports from the UAE, South Africa, and Switzerland increased by a third. These countries, which account for the majority of gold supplies to India, increased their gold exports to India to $14.9 billion in November.
Surging Imports from UAE and Broader Trade Deficit Concerns
India’s imports from the UAE have also risen significantly YoY to $6.12bn in November, primarily stimulated by the free trade agreement between the two countries in May 2022. Though the export of goods has increased by 11.38% to the UAE, the overall trade deficit was negative, with an excess of $3 billion for the month.
This increasing trade disparity underlines the need to adjust Indian trade policy. Moreover, imports from the UAE for April and November were up by 60.84 % compared to the previous fiscal year.
According to CRISIL’s latest research note, there are likely problems with India’s trade deficit because of the imminent US tariff increases on China. The policy think tank expects Beijing to devalue its currency to address downward price pressures by selling cheaper products across other economies such as India. This kind of scenario requires anticipative surveillance as well as appropriate prevention to protect and sustain economic equilibrium.
Strategic Trade Relations and Future Outlook
In the fiscal year, India’s ten largest import partners were China, Russia, and the UAE, to present the trade relations of India throughout various geopolitical regions.
Exports to China decreased, whereas imports from the Asian giant rose to about 10% year-on-year to $74.68 billion during the first eight months of the current fiscal year. On the other hand, the United States continued to be India’s largest import partner, where exports during the year stood at $52.94 billion, up by 5.27%.
