Exporters who witnessed a 3.1% annual decline in shipments last fiscal are again upbeat as order inflows have seen a significant rise in April, the first month of new fiscal year. Orders have risen across key sectors in April as compared to March and April of last year, sources said.

The sectors like textiles and apparel and leather are reporting an increase in orders which points to a healthy first quarter, director general and chief executive officer of Federation of Indian Export Organisations (FIEO) said Ajay Sahai.

Export figures for April is yet to be released by the commerce ministry.

Another factor that will help in coming months is the shipments of orders that were booked in March but could not leave Indian shores on time as the Red Sea crisis and other developments in the Middle East have disrupted global shipping. Earnings from these orders will be reflected in the early months of 2024-25.

Key reason for disruption in shipping is that after Houthi rebels of Yemen started attacking merchant ships the cargo vessels started avoiding the Suez Canal and detouring around the Cape of Good Hope. Transit times have increased by 30% and container shipping capacity has dropped by 9% as ships spend more time at sea.

The experience of exporters aligns with the forecasts of revival in world trade by World Trade Organisation (WTO) and United Nations Conference on Trade and Development (UNCTAD). WTO expected world trade volumes to expand 2.6% in 2024 after a contraction of 1.2% in 2023. In value terms the world merchandise trade had fallen 5%.

India too had recorded a 3.1% decline in exports to $ 437 billion in FY 24. In the last financial year the April-June quarter was the toughest when exports had declined 6.3%. So this year the low base would also help the numbers look good.

The engineering sector that contributes 25% to total exports is also reporting order inflows at above the last year’s level. “April is traditionally a slow month after a rush in March and order flow is by and large at the sustaining at least year’s pace,” chairman of Engineering Export Promotion Council (EEPC) Arun Kumar Garidia said.

Engineering exports struggled in the early part of FY 24 but made a sharp rebound in the second half to close the year with a 2.1% growth to $ 109.32 billion. The sector also increased its share in India’s exports to 5.01% from 23.74% in FY 23.

The export sector has weathered the global headwinds from macroeconomic factors and geopolitical tensions well in FY 24 but fears of an escalation remain. Sahai said if the Middle East situation deteriorates it will pose a challenge.

Exports seen higher in April, order inflows robust