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India Gazette
4 days ago
- Business
- India Gazette
India well positioned to regain strong export growth as global trade conditions likely to stabilize in H2 of 2025: Experts
New Delhi [India], June 17 (ANI): India's trade performance in May 2025 has shown strength and stability, despite uncertain global conditions, according to views shared by industry experts and economists. FIEO President S C Ralhan highlighted that India's total exports, including goods and services, increased by 2.8 per cent to USD 71.12 billion in May 2025, up from USD 69.20 billion in May 2024. The growth was mainly driven by services such as software, consultancy, and financial services. Even though merchandise exports dipped slightly to USD 38.73 billion, the continued service momentum helped support overall performance. 'Exporters are adapting well to a tough global environment,' said Ralhan. 'The ability to sustain export growth despite logistical disruptions, especially in the Middle East, is a testament to the sector's agility and policy support.' On the import front, merchandise imports eased to USD 60.61 billion, while overall imports (goods and services) stood at USD 77.75 billion, down from USD 78.55 billion in May 2024. He added, 'With appropriate policy interventions and global conditions expected to stabilise in the second half of 2025, India is well-positioned to regain a strong export growth trajectory'. Pankaj Chadha, Chairman of EEPC India, stated that the engineering exports sector has managed to stay steady despite continued international challenges. While there was a minor decline of 0.8 per cent in engineering goods exports in May 2025, down to USD 9.89 billion from USD 9.97 billion in the same month last year, the overall numbers remain encouraging. He said, 'Overall global situation, however, remains volatile. Uncertainty has only been mounting due to geopolitical tensions in key parts of the world. The latest Israel-Iran conflict threatens to multiply the challenges for the exporting community. Apart from a rise in input costs as a result of a jump in crude prices, there is heightened concern around the blocking of the Straits of Hormuz by Iran in case tensions further intensify. Aditi Nayar, Chief Economist at ICRA, noted that India's merchandise trade deficit reduced significantly to USD 21.9 billion in May 2025 from USD 26.4 billion in April. This is expected to help contain the current account deficit (CAD) for Q1 FY2026 to around USD 13 billion, or 1.3 per cent of GDP. She said, 'If crude oil prices average around USD 75/barrel over the remainder of this fiscal, we foresee the CAD at 1.2-1.3 per cent of GDP for FY2026. While India's exports contracted slightly in May 2025, this was entirely led by oil exports. Non-oil exports posted a YoY growth for the second consecutive month, led by electronic goods, garments, organic and inorganic chemicals, and marine products, which helped to moderate the trade deficit. Further, the YoY contraction in oil and gold imports helped to contain the merchandise trade deficit'. (ANI)
Hans India
4 days ago
- Business
- Hans India
India's services exports shine amid global challenges: FIEO
New Delhi: India's latest trade figures reflect the robust performance of its services sector, which continues to act as a buffer against the challenges of muted global demand, geopolitical tensions, and high interest rates, the Federation of Indian Export Organisations (FIEO) said on Monday. Despite global economic headwinds, India's overall exports (merchandise and services combined) demonstrated resilience, registering a 2.8 per cent growth in May 2025. Total exports reached $71.12 billion, up from $69.20 billion in May 2024. 'This uptick was primarily driven by continued strength in services exports, particularly in software, consultancy, and financial services,' said SC Ralhan, President, FIEO. 'Exporters are adapting well to a tough global environment. The ability to sustain export growth despite logistical disruptions, especially in the Middle East, is a testament to the sector's agility and policy support,' said Ralhan. Overall imports (goods + services) saw a marginal dip to $77.75 billion, compared to $78.55 billion in May 2024, suggesting stable domestic demand for essential inputs and services. Ralhan pointed out that the decline in merchandise imports could also reflect growing success in import substitution and domestic capacity building, aligned with the government's push for self-reliance. To sustain and accelerate export growth, the FIEO President emphasised the urgent need for continued support for MSMEs through the Interest Equalisation Scheme; Expedited Free Trade Agreement (FTA) negotiations to boost market access particularly BTA with US; simplification and digitisation of trade procedures to reduce transaction costs; and making e-commerce exports seamless by addressing various procedural issues. Looking ahead, Ralhan urged the government to maintain a sharp focus on sector-specific issues, and capitalise on India's growing services strength by investing in digital infrastructure, talent development, and targeted global promotion. 'With appropriate policy interventions and global conditions expected to stabilize in the second half of 2025, India is well-positioned to regain a strong export growth trajectory,' he noted.
Time of India
5 days ago
- Business
- Time of India
Iran-Israel war could hurt exports; increase freight rates: Exporters
The Iran-Israel conflict has further increased global economic uncertainties, impacting world trade, including India's exports, as it is expected to drive up both air and sea freight rates, exporters say. They said that India's exports to Europe and counters like Russia may get impacted due to this war. If the conflict continues for long, the movement of merchant ships through routes such as Strait of Hormuz between Iran and UAE, and Red Sea would be affected. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo "The war will further hurt global trade. The situation was gradually improving but now again the trade will be impacted. Our exports to Europe and countries like Russia may get hurt. Freight rates and insurance are expected to increase," Federation of Indian Export Organisations (FIEO) President S C Ralhan said. Indian export consignments gradually started moving through the Red Sea route but now again it would get impacted, he said. Live Events The immediate fallout of the conflict that started on early Friday or June 13 will be freight and insurance charges going up after a period of calm as Red Sea routes were slowly coming back to normal, Mumbai-based exporter and Technocraft Industries Ltd Founder Chairman S K Saraf said. If Iran-Israel war would continue for a week then the situation will be difficult for global trade, Saraf said, adding, "Iran and Israel too are our big trading partners". Cargo ships had gradually returned on Red Sea routes, saving them 15-20 days while moving to US and Europe from India and other parts of Asia. "The merchant ships will again avoid the Red Sea which will lead to escalation of freight costs that will have to be borne by traders. If war would go beyond a week, it can push freight rates by about 50 per cent," he added The present conflict that began with an attack on Israel on October 7, 2023 had brought cargo movement through Red Sea routes to a halt due to attacks by Houthi rebels on commercial shipping. After the US intervened with attacks on the rebels, the firing on commercial ships stopped. "Everything depends on whether the conflict remains localised or expands to include other countries. Its impact will be first felt in global crude oil prices," FIEO Director General Ajay Sahai said. Apart from the Red Sea route, this time transit through Strait of Hormuz is another factor that is weighing on the world energy trade. The Strait of Hormuz, located between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. Around 21 per cent of global petroleum liquids consumption passes through that route. China, India, Japan, and South Korea were the top destinations for crude oil moving through the Strait, Oman also uses this route to supply liquefied natural gas to India. Only Saudi Arabia and the United Arab Emirates (UAE) have operating pipelines that can circumvent the Strait of Hormuz. Last year, the situation around the Bab-el-Mandeb Strait, a crucial shipping route connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, escalated due to attacks by Yemen-based Houthi militants. Around 80 per cent of India's merchandise trade with Europe passes through the Red Sea and substantial trade with the US also takes this route. Both these geographies account for 34 per cent of the country's total exports. The Red Sea strait is vital for 30 per cent of global container traffic and 12 per cent of world trade. India's exports to Israel have fallen sharply to USD 2.1 billion in 2024-25 from USD 4.5 billion in 2023-24. Imports from Israel came down to USD 1.6 billion in the last fiscal from USD 2.0 billion in 2023-24. Similarly, exports to Iran of USD 1.4 billion, which were at the same level in 2024-25 as in 2023-24, could also suffer. India's imports from Iran were at USD 441 million in FY25 as against USD 625 million in the previous year. The conflict adds to the pressure world trade was under after the US President Donald Trump announced high tariffs. The government is expected to hold meetings with exporters in the coming days to discuss the recent developments. Based on the tariff war impact, the World Trade Organisation (WTO) has already said that the global trade will contract 0.2 per cent in 2025 as against the earlier projection of 2.7 per cent expansion. India's overall exports that had grown 6 per cent on year to USD 825 billion in 2024-25 were expected to touch USD 1 trillion by the end of this year, according to FIEO, and it could fall well short of this target due to geopolitical uncertainties.
Indian Express
6 days ago
- Business
- Indian Express
Trade to inflation, how Iran-Israel conflict may affect India, markets
Just as global shipping lines and traders had begun to breathe a sigh of relief from elevated freight rates, with vessels returning to the crucial Red Sea route from the longer Cape of Good Hope passage, a direct conflict between two major West Asian powers has reignited fears of surging oil prices and more trade disruptions. The escalating tension between Iran and Israel sent shockwaves through global stock markets, with India's benchmark Sensex closing 573 points lower on Friday. Experts warn that Iran may respond by closing the strategic Strait of Hormuz — a key passage through which 20–25 per cent of global oil supply transits, as well as a critical corridor for LNG (liquefied natural gas) shipments from Qatar and the UAE. Qatar, notably, is among the top LNG suppliers to India. The renewed instability could pose deeper macroeconomic challenges for India, extending beyond trade, particularly as the country's reliance on oil imports continues to rise. While India was compelled to halt oil imports from Iran following US sanctions in 2019, Goldman Sachs estimates that Iranian supply could fall by 1.75 million barrels per day (b/d) for six months before gradually recovering. 'Assuming OPEC+ compensates for half the peak shortfall from spare capacity, Brent could rise above $90 per barrel before retreating to the $60s by 2026 as supply recovers,' the investment bank noted. A fall in prices of fruits, pulses and cereals had helped lower India's headline retail inflation to a 75-month low of 2.82 per cent in May 2025. This easing inflationary trend had prompted the Reserve Bank of India's Monetary Policy Committee (MPC) to cut the policy repo rate by a larger-than-expected 50 basis points. However, the RBI cautioned that 'monetary policy is left with very limited space to support growth'. Risk of wider energy disruption S&P Global noted that, so far, both Iran and Israel have avoided directly targeting energy infrastructure. However, Israel has temporarily shut its Leviathan gas field — a key supplier to Egypt and Jordan — as a precaution. Iran, meanwhile, reported no damage to its oil refineries or storage depots in the initial attacks. Iran possesses approximately 2.2 million b/d of crude refining capacity and an additional 600,000 b/d of condensate splitter capacity. In May, it produced about 4 million b/d of crude and condensate. According to S&P Global, Iran's crude exports could fall below 1.5 million b/d this month. Federation of Indian Export Organisations (FIEO) president S C Ralhan had said in May that conditions in the Red Sea were improving, with ships resuming their regular routes. Exporters believed the risk of a wider conflict remained contained — as long as major powers like Israel and Iran stayed out of direct confrontation. Now, with traders' worst fears materialising, vessels may be forced to continue using the Cape of Good Hope route. This detour means sustained upward pressure on freight rates. The Red Sea crisis had already caused a spike in shipping costs due to voyage duration increasing by 10–14 days. Longer voyages also tightened vessel availability, exerting inflationary pressure on freight rates. The crisis also hit LNG flows through the Suez Canal, which dropped to 4.15 million tonnes in 2024 — a sharp fall from 32.36 million tonnes in 2023 and 34.94 million tonnes in 2022, according to Kpler data. Meanwhile, LNG volumes via the Cape of Good Hope rose more than five-fold, from 11.76 million tonnes in 2022 to 59.37 million tonnes in 2024. Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
Time of India
03-06-2025
- Business
- Time of India
FIEO worried over US tariff hikes on steel, aluminium
The Federation of Indian Export Organisations ( FIEO ) Saturday raised concerns about potential disruption to India's steel and aluminium exports to the US after President Donald Trump's announcement of a plan to double import tariffs on steel and aluminium to 50 per cent from 25 per cent. They particularly fear that the exports of value-added and finished steel products and auto-components, stainless steel pipes, and structural steel components could be hurt. This potential increase comes under Section 232 of the US Trade Expansion Act of 1962, a law that allows the president to impose tariffs or other trade restrictions if imports are deemed a threat to national security. "These products are part of India's growing engineering exports, and higher duties could erode our price competitiveness in the American market," said SC Ralhan , president, FIEO. India exported approximately $6.2 billion worth of steel and finished steel products to the US in FY25 including a wide range of engineered and fabricated steel components and about $0.86 billion of aluminium and its products. The US is among the top destinations for Indian steel manufacturers, who have been gradually increasing market share through high-quality production and competitive pricing. Exporters said that though the decision stems from domestic policy considerations in the US, such sharp increases in tariffs send discouraging signals to global trade and manufacturing supply chains. India and the US are negotiating a Bilateral Trade Agreement and exporters said that the move will complicate the talks. "It's unfortunate that while BTA negotiations are going on, such unilateral tariff increases should be done. It only makes the work of the negotiators much more difficult and complicated. This will definitely impact the engineering exports, which are about $5 billion under this head," Pankaj Chadha, chairman EEPC India. Chadha added that since the UK has been given exemption from Section 232, the same exemption should also be given with TRQ restrictions to India. "We urge the government to take up the issue at the bilateral level to ensure that Indian exporters are not unfairly 25 per cent additional duty will be a huge burden, which is difficult to be absorbed by the exporter/importer," Ralhan said. On March 8, 2018, the US promulgated safeguard measures on certain steel and aluminium articles by imposing 25 per cent and 10 per cent ad valorem tariffs respectively on such products with effect from March 23, 2018. On February 10, 2025, it revised the safeguard measures on imports of steel and aluminium articles, effective from March 12. New Delhi said that the US failed to notify the WTO Committee about a decision to apply safeguard measures and as an affected member with significant export interest, it has requested consultations with Washington and proposed retaliation against the measure.
