Trade deficit to moderate, goods exports could hit $480 billion: Commerce Secretary

India’s goods exports are likely to touch $470-480 billion this year from $422 billion last year and the trade deficit is expected to moderate in coming months, the country’s top trade official said on Tuesday.

While the country’s official export target for 2022-23 is likely to be announced formally by Prime Minister Narendra Modi, Commerce and Industry Minister Piyush Goyal said the target was almost finalised but policymakers were waiting for the geopolitical situation to stabilise, which does not seem to be happening yet.

“Right now, it doesn’t seem to be stabilising soon,” Mr. Goyal said. “So we may have to freeze the target and let you know very soon… But I can tell you, we are on track as of August 15, to the target we had set at the beginning of the year. But since the geopolitical situation, recessionary conditions in developed countries are surfacing every day, we want to be sure that we don’t overstate our expectations,” he added.

Commerce Secretary BVR Subrahmanyam asserted that India’s trade deficit deficit won’t cross the ‘discomfort level’ and that he expected exports to touch $750 billion this year, with goods exports of about $470-480 billion.

Expressing confidence about India’s exports this year, he said: “In the 75th year, our goods and services trade will certainly cross $750 billion.. of which about $470-480 billion would be goods and the rest would be services. But if you look at services, they are growing jolly good at $25 billion a month. So I think services will get us $300 billion in any case.”

“We are not giving any numbers yet… The Prime Minister will be holding an event at which we will be announcing the target numbers. But we are pretty much on track,” the Secretary said.

Emphasising that India cannot run a trade surplus with every country, Mr. Subrahmanyam said: “I think there is going to be a moderation in the trade deficit from the current levels. One month was pretty bad, but if you see, there has been a moderation in oil and commodity prices and we are giving a renewed thrust to exports. So I think in totality, we are not going to cross a discomfort level.”

The Commerce Ministry is looking very closely at the trade deficit numbers and taking steps to increase domestic production in areas of high imports. “If you go to our website, you can actually see domestic manufacturing opportunities from imports. So I think it’s not going to be that worrisome. We will push exports and a lot of imports are inelastic – fuel, edible oil… but I think, as time passes, we will get over it,” he said.

“A lot of our exports have a strong import component. So, actually increasing exports is also pulling some imports, so it is not a bad thing by itself,” Mr. Subrahmanyam underlined, adding that India is in a very good and ‘lucky’ situation despite global headwinds and concerns about recession in some countries hitting demand.