The availability of containers has improved, and sea freight rates have fallen by up to 15%. Still, the volume growth in exports in the ongoing fiscal year (1st Jan to 31st Dec) may not be significant as the global inventory is high and key rates in world markets are rising, they added.
The Federation of Indian Export Organizations (FIEO) has pegged India’s merchandise exports in the current fiscal year at the US $ 475 billion, 14% higher than the previous financial year but much less than the growth seen in FY22 FY21.
In FY22, India’s merchandise exports rose by 43% over FY21 to the US $ 418 billion.
During FY22, global markets created an inventory as commodity prices increased. Exports had gained momentum after the second wave of COVID-19. Still, due to inflationary pressure, the volume growth of exports will be less. Also, the dynamics might change if the Russia-Ukraine conflict does not end soon. According to the current situation, India can expect its merchandise exports for FY23 to fall short of US $ 475 billion. With China’s economy still in lock down after four months of Covid-19-leading prohibitions, Indian exporters will face stiffer competition from China. Container availability has increased, and freight rates have decreased. We have to see how long this situation continues.
“Once China becomes active, the container shortage may again emerge. While international container prices have increased by up to 15% in May in India, they have declined, similar to the trend observed in China. There has been a month-on-month decline in the prices of 40-foot containers in Chennai to the US $ 4015 in May from the US $ 4044 in April. India recorded its highest-ever textiles and apparel exports at the US $ 44.4 billion in 2022, indicating an increase of 41% over FY21.