Double-Digit Import Growth in February Led by Switzerland, UAE, and China

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CRISIL reported that India’s merchandise exports rose by 11.9% year-on-year in February to reach $41.4 billion, demonstrating robust momentum despite the ongoing Red Sea crisis and varying economic growth among trading partners.

This marks the highest growth rate since June 2022, following a 3.1% increase in January. The analysis noted that exports have now grown for the third consecutive month, suggesting sustained momentum in trade.

CRISIL remarked that while the Red Sea crisis has posed limited near-term challenges to India’s exports, a key aspect to monitor will be the impact of the crisis on prices during the renewal of export contracts in the future.

Additionally, a notable increase in imports from Switzerland, the United Arab Emirates (UAE), and China resulted in a double-digit rise in India’s imports in February 2024, reaching a 17-month peak. Following a period of negative growth in merchandise imports for most of 2023, inbound shipments have now turned positive for two consecutive months since January.

In February, the United Arab Emirates (UAE) surpassed China as the leading source of imports with $8.2 billion, while Switzerland experienced the highest annual growth rate of 140%, possibly attributed to increased gold imports.

Imports from Russia declined by 4.8% due to reduced crude oil imports, while inbound shipments from the USA and South Korea contracted by 7.35% and 3.3%, respectively during the month.

In January 2024, India’s services exports maintained their upward trajectory, increasing by 10.8% compared to the previous year, while imports experienced a slight uptick of 0.1%. Consequently, the services trade surplus expanded to $16.17 billion from $13.17 billion a year ago and $15.98 billion the previous month, according to a report.

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