India’s merchandise exports rose 24.2 per cent year-on-year in April to the third-highest level of $38.2 billion. As commodity prices rose due to Russia’s ongoing war with Ukraine, preliminary trade data released by India’s Commerce Ministry showed. Outbound shipments hit a record $42.2 billion last month.

Imports surged 26.6 per cent to $58.3 billion in April, leading to a trade deficit of $20.1 billion for the month. Petroleum products (113.2 per cent), electronics (64 per cent) and chemicals (26.7 per cent) led export growth in April, while engineered products (15.4 per cent), pharmaceuticals (3.9 per cent) and apparel (16.4 per cent) saw lower-than-average increases grow horizontally. On the other hand, exports of gems and jewellery (-2.1 per cent) and rice (-14.2 per cent) contracted this month.

Imports rose strongly in April despite a 73 per cent drop in gold imports to $1.7 billion. Coal (136.4 per cent), crude oil (81.2 per cent), chemicals (46.9 per cent), vegetable oils (33.6 per cent), and electronics (28.6 per cent) led to the import growth. ICRA chief economist Aditi Nayar said she expects the merchandise trade deficit to exceed $20 billion for most of FY23, barring a sharp pullback in commodity prices.

Engineering Export Promotion Council chairman Mahesh Desai said that despite geopolitical challenges, engineered product exports continued to gain momentum in FY22. Still, high logistics costs and unprecedented increases in raw material costs have been hurting engineering and other industries.

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The global economic outlook has been bleak since the war in Ukraine on February 24. The World Trade Organization (WTO) last month cut its forecast for international trade in 2022 to 3 per cent from 4.7 per cent, citing ongoing conflict and possibly more contagious subtypes of Omicron linked to China. Despite comfortably surpassing the $400 billion export target to $20 billion in FY22, the Commerce Department doesn’t expect any new targets for FY23 given the uncertainty surrounding world trade.