According to the latest data released by the National Bureau of Statistics (NBS), Nigeria has experienced a dramatic 61% decrease in its exports to India over the past year.
This revelation comes as President Bola Ahmed Tinubu leads a Nigerian corporate delegation to India for a business conference held alongside the G20 summit in the country.
The primary objective of this conference is to attract foreign direct investment to Nigeria.
In 2022, India held the position of Nigeria’s top export destination, but recent data suggests that it has slipped out of the top five.
India slides from top spot as Nigeria’s export destination
Spain took over as Nigeria’s leading export destination in the third quarter of 2022.
According to the NBS, Nigeria’s trade exports to India for the second quarter of 2023 amounted to N463.3 billion, making India Nigeria’s sixth-largest export destination.
This marks a sharp decline from the same period in 2022 when Nigeria’s trade exports to India reached N1 trillion, making India Nigeria’s largest export market at that time.
The downward trend in exports to India has been ongoing since the third quarter of 2022 when total exports dropped to N619.2 billion.
By the end of 2022, exports had further decreased to N490.4 billion.
Total exports to India have fallen by 61% from N2.1 trillion in the first half of 2022 to N849 billion in the first half of 2023.
Total trade with India, including imports, has declined by 44.6% from N3 trillion in the first half of 2022 to just N1.69 trillion in the first half of this year.
Nigeria currently maintains a modest trade surplus with India, amounting to just over N5 billion in the first half of 2023, a significant drop from the approximately N1.2 trillion surplus observed in the same period in 2022.
The primary reason for this substantial decline in exports is the decrease in crude oil exports, which previously represented a significant portion of the trade between Nigeria and India.
Crude oil exports to India in the first and second quarters of 2022 stood at around N1.03 trillion and N1.09 trillion, respectively.
However, there was a noticeable decline in the second half of 2022, with exports plummeting to N559.3 billion in Q3 and N420.8 billion in Q4.
This downward trajectory continued into 2023, with crude oil exports falling to just N327.8 billion in the first quarter and N368.2 billion in the second quarter.
The overall decrease in crude oil exports to India has also impacted Nigeria’s total crude oil exports, with data indicating that total crude oil exports in the first half of 2023 were N10.6 trillion, compared to N11.5 trillion during the same period in 2022.
One significant factor contributing to this decline is the ongoing conflict between Russia and Ukraine.
The war has made Russian crude oil a more cost-effective option, which may have prompted India to reduce its reliance on Nigeria’s crude oil exports.
According to a New York Times report citing the International Energy Agency, India purchases nearly two million barrels of oil per day, approximately 45% of its imports.
Additionally, Nigeria faces competition from Iraq and other Middle Eastern countries that also export crude oil to India.
India is the third-largest oil consumer and importer globally, importing around 84% of its crude oil requirements.
Liquefied Natural Gas (LNG) also plays a significant role in India’s energy needs, accounting for about one-fourth of the country’s total gas demand.
India ranks as the fourth-largest importer of LNG, and its demand for both oil and natural gas continues to grow.
President Tinubu’s visit to India primarily aims to attract foreign direct investment into Nigeria.
However, a pressing concern is the need to persuade India to resume importing Nigeria’s crude oil, as this is crucial for stabilizing Nigeria’s foreign exchange inflows.