Geopolitical unrest hitting exports in Q1 fy25: FIEO

New Delhi: The escalating geopolitical tension may have implications for the India’s exports in the first quarter of 2024-25 as it is likely to impact global demand, apex exporters body FIEO said.

The global uncertainties caused by continuing war between Russia and Ukraine has impacted India’s outbound shipments in 2023-24, which recorded a decline of 3.11 per cent to $437 billion. Imports too dipped by over 8 per cent to $677.24 billion.

“If the global situation continues to be like this, it would impact global demand. In the first quarter numbers, the demand slowdown may be visible,” FIEO Director General Ajay Sahai said.

He added that despite all the challenges, freight rates are softening and it is giving an indication that demand may be impacted in the times to come. He cautioned that further escalation of the current situation could have serious implications on the world trade. +“Besides geopolitical uncertainties, high inflation and high interest rates are also crucial reasons for demand slowdown,” he said, adding certain advanced economies like Europe may witness more slowdown.

He also said that India’s domestic currency depreciated only about 1.3 per cent during 2023-24 as against Chinese Yuan’s 4.8 per cent; Thai Baht 6.3 per cent and Malaysian Ringgit’s 7 per cent. When asked about the impact of Israel-Iran war, he said certain exporters from engineering sector have stated that the demand for goods that are going to the UAE and then to Iran has come down.