May the twain meet: Look East as much as West for Indian exports

India’s West-oriented export thrust is welcome but it would be pragmatic not to lose focus on the booming Asia Pacific region

- DHARMAKIRTI JOSHI, ADHISH VERMA

India's goods exports printed 14.5% lower for the April-July period, having contracted for the sixth month on a trot in July. A slump in goods exports such as this would typically drive attention to the imminent slowdown in Western advanced economies. Only, this time around, the bigger problem seems to be closer home the Asia Pacific (APAC) region, which comprises the Association of Southeast Asian Nations (ASEAN) and northeast, south and east Asia.

While during April-July India's total goods exports contracted 14.5%, exports to the APAC region were down a substantial 22.0%. The decline in exports to the US and European Union (EU) was lower at 11.5% and 4.8%, respectively.

The slowdown in exports to the APAC region also started earlier. In fiscal 2022-23, when India's overall goods exports and those to the US and EU rose 6.9%, 3.1% and 15.2%, respectively, exports to APAC markets were down 11.2%. Hence, the decline this fiscal year is on an already low base of last year.

The starkest sub-region-wise decline in fiscal 2022-23 was to northeast Asia (-18.9%); followed by south Asia (-18.1%) and east Asia (-13.7%). Exports rose by a mild 3.9% to ASEAN.

So, did these regions import less from other parts of the world last year, apart from facing inherent systemic issues? On the contrary, even as India's exports to APAC markets fell, most of these regions imported more from across the world. Thus, the Indian export slump was not on account of lower regional demand.