Merchandise exports stay robust
India’s trade deficit rose to a four-month high of $15.33 billion in the month of April
Merchandise exports as well as imports remained robust in April despite localised lockdowns across the country, showing signs of increasing external and domestic demand for goods, leaving behind a four-month-high trade deficit of $15.2 billion.
Preliminary data released by the commerce ministry on Sunday showed merchandise exports rose at a record 197% to $30.21 billion in April while merchandise imports increased 166% to $45.45 billion.
To be sure, this jump comes over the low base of last year when India entered a nationwide lockdown that disrupted supply chains, impacting both imports and exports.
In April 2020, India’s exports and imports stood at $10.36 billion and $17.12 billion, respectively. However, the trade performance in April this year softened sequentially from the March print. In March, exports and imports hit record heights at $34.45 billion and $48.38 billion, respectively.
Non-oil exports registered a 201% growth in April at $26.85 billion, led by engineering, gems and jewellery, and textiles shipments, while non-oil imports grew 179% to $34.65 billion led by gold, electronic goods and vegetable oil sectors.
Sharad Kumar Saraf, president of Federation of Indian Export Organisations, said the impressive growth reiterates his assessment that order booking position of exporters is extremely good and with gradual improvement of situation in the country, will push exports growth further.
“Growth in labour-intensive sectors like gems and jewellery, handicrafts and carpets augurs well for the job scenario, which is most relevant in the current context,” he added.
The World Trade Organisation (WTO) last week said prospects for a quick recovery in world trade have improved as merchandise trade expanded more rapidly than expected in the second half of last year.
According to new estimates from the WTO, the volume of world merchandise trade is expected to increase by 8% in 2021 after having fallen 5.3% in 2020, continuing its rebound from the pandemic-induced collapse that bottomed out in the second quarter of last year.
Engineering Export Promotion Council chairman Mahesh Desai said the remarkable performance of the engineering goods sector in the last few months is quite reassuring for exporters who were hit badly last year. “Localised lockdowns and night curfews announced by various states to contain a second wave of pandemic could cause shortage of workers and logistical issues, but they should only be a short-term problem. We remain hopeful of continued recovery,” he added.
The escalating coronavirus cases across the country crossing 4 lakh cases in a day has forced many states to announce localised lockdowns and night curfews, which are expected to delay a strong recovery in domestic economic activity.
Brickwork Ratings on Tuesday revised its 2021-22 economic growth projection for India to 9% from 11% estimated earlier, holding that the earlier presumption of a V-shaped economic recovery is unlikely as the deadly second wave of Covid-19 has brought an abrupt halt to India’s nascent economic recovery from the pandemic.
Rating agency Standard & Poor’s last week said a drawnout Covid-19 outbreak with daily cases setting new records will impede India’s economic recovery.