The Indian economy and exports will be moderately impacted in 2023 by weak global demand and recession in large economies and to improve its current account, the country should aim at reducing energy import bill, economic think tank GTRI said on Tuesday.

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The Global Trade Research Initiative (GTRI) said that in 2022, India will pay USD 270 billion in imports of crude oil and coal, which is about 40 per cent of total merchandise import bill.

India must re-energize exploration of local oil fields and enhance production through coal mines. Any development will cut the energy import bill substantially and improve the current account, it added.

It also said the US effort to create alternate supply chains excluding China is gradually leading to restructuring of global supply chains and relocation of few large manufacturing firms shows that India is in a good position to benefit from this trend.

India should do so without compromising its strategic autonomy, it said adding that in various free trade agreements (FTAs) under negotiations, India should carefully evaluate the impact of new provisions on domestic policies.

Developed countries including the US and the EU use such provisions in creating non-tariff barriers against exports from partner countries.

Talking about the outlook for 2023, it said. The Indian economy and exports will be moderately impacted by weak global demand and recession in large economies. To improve its current account, it should aim to cut energy import bill.

On trade data, it said India's exports are expected to touch USD 440-450 billion in 2022 despite the global uncertainties as against USD 395 billion in 2021.

India's merchandise imports are also likely to be around USD 725 billion in 2022, higher than USD 573 billion in 2021.

India is set to achieve the highest ever export turnover in 2022. Its total (merchandise and services) export turnover will be in the range of USD 740-750 billion. This calls for celebrations as the achievement comes despite gloomy conditions worldwide. Merchandise exports are expected to be in the range of USD 440-450 billion, it said.

Services exports are expected to be USD 295-300 billion in 2022 as compared to USD 254 billion in 2021.

The commerce ministry, which releases the trade data, has so far released the data till November 2022. In January-November 2022, merchandise exports crossed USD 405 billion.

Former Indian Trade Service officer Ajay Srivastava is the co-founder of GTRI. He took voluntary retirement from Government of India in March 2022. He has a rich experience in trade policy making, and issues related to WTO and FTAs.