India's trade deficit in September 2023 marked a significant year-on-year reduction, decreasing from $15.03 billion in September 2022 to $4.92 billion. However, this decline in the trade deficit was mirrored by a decrease in overall merchandise exports, falling from $35.39 billion in September 2022 to $34.47 billion in September 2023. The Commerce Ministry attributed this export decline to weakened global demand and other contributing factors.

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Citing a decline in unit value realisation from export of petroleum products from $1094.28/ton last year to $727.76/ton this year, the Ministry said that despite a rise noted in the volume of petroleum exports compared to last year, the amount being reflected in trade data was far lesser due to decline in global prices.

The government attributed the decline in exports of gems and jewellery to lower global demand, issues in sourcing of diamonds and a huge duty on gold imports apart from geopolitical factors like the conflicts between Russia and Ukraine, and Israel and Palestine.

Excluding gems, jewelry, and petroleum product exports, September 2023 recorded a 1.86% increase in year-on-year exports, the ministry said. Importantly, merchandise imports from April to September 2023 registered a substantial 12.23% decline.

Despite the WTO forecast for global growth falling from 1.7% to 0.8% by October 2023, the government said that green shoots are being noted in India's exports, particularly in the photovoltaic and electronics sector due to improved export competitiveness after the advent of PLI schemes. In August 2023, merchandise exports grew by 3.88% following data reconciliation, providing a positive development amidst a challenging global scenario.