In FY22, India’s exports crossed the $400-billion mark for the first time ever. However, the import bill also passed $600 billion. The steep climb in both the figures is a reflection of soaring commodity prices in the international markets due to the pandemic and the Russia-Ukraine war. In fact, the upsurge in imports in FY22 widened the trade deficit to its highest level in two decades. The export peak achieved in FY22 was due to the rise in the value of commodities, rather than their volume. This is exemplified when exports are expressed as % of GDP (market prices). In FY22, despite the peak in absolute terms, exports as a % GDP were relatively lower than the levels recorded in FY14. Meanwhile, the foreign exchange reserves were at a nine-month low in March 2022.
In absolute terms
The chart shows India’s imports and exports in $ billion. While the exports crossed the $400-billion mark in FY22, the imports too grew substantially and crossed the $600-billion mark. The drastic rise in the value of imports and exports is a reflection of high commodity prices due to COVID-19 and the Russia-Ukraine war.
