India’s merchandise exports, at $34.5 billion in December 2022, were down 12.2% on-year largely due to the high base of December 2021. But on-month, exports were stable. Recall that November export numbers had been revised significantly up, to $34.8 billion from $31.9 billion earlier, translating to 9.6% growth (vs 0.6% as per the initial data).

Core (non-oil, non-gold) exports fell by a lesser degree (-8.5% on-year) than overall exports. Again, the annual decline was mostly high base effect driven. Sequentially, core exports rose in December¹.Oil exports, however, fell, tracking a decline in international crude oil prices.

The apparent resilience in India’s exports is likely a reflection of the fact that the growth slowdown in key advanced economies has not been as sharp as feared earlier, at least for now. That said, sustaining export performance is likely to become a challenge, as global growth is expected to sharply slow in the coming months, especially in the United States (US) and Europe, which are big export markets for India.

Merchandise imports too fell, but at a much slower pace than exports. At $58.2 billion, they were down 3.5% on-year in December (vs. 9.8% growth in November). While imports contracted for the first time this fiscal year, it was partly on account of a high base and partly due to a sharp decline in gold imports. But on-year core import growth was still positive. Moreover, it improved sequentially in December, indicating persisting momentum in domestic economic activity. Oil imports, on the other hand, fell, in sync with softer international crude prices that declined to an average of $78.1/barrel in December, from $87.4/barrel in November.

¹ They were stable on-month in seasonally adjusted terms