India’s merchandise exports nearly trebled in April to $30.21 billion over the same period year, mainly due to low-base effect, as Covid-19 induced nationwide lockdown a year ago had temporarily stopped economic activity.
However, exports grew 16.03 per cent from $26.04 billion in April 2019, indicating that a low base was also supported by strong demand in the first month of the current fiscal. An uptick in outbound shipments in April was driven by demand for petroleum products, engineering and gems and jewellery products. Latest data also indicates that an unprecedented surge in covid-19 cases as well as localised lockdowns in the country did not affect the demand for goods. On a sequential basis, exports dipped by 12.3 per cent from $34.45 billion in March.
Preliminary data from the Ministry of Commerce and Industry on Sunday put India’s merchandise imports in April at $45.45 billion, up 165.99 per cent YoY. Inbound shipments rose 7.22 per cent from $42.39 billion in April 2019. This resulted in a trade deficit of $15.24 billion, up 120.34 per cent YoY. The deficit was $16.30 billion in April 2019.
Rise in inbound shipments was mainly on the back of higher import of gold, petroleum products and electronic goods, data showed.
“The impressive growth reiterates our assessment that the order booking position of our exporters is extremely good and with gradual improvement of the situation in the country, will push exports growth further,” Sharad Kumar Saraf, President, Federation of Indian Export Organisations (FIEO). He said that over 15 per cent growth on the base of April 2019 is a better indicator and reflects a positive double digit trend.
However, rising imports and a widening trade deficit is also a matter of concern and should be looked into, Saraf added.
In April, the value of non-petroleum exports was $26.85 billion, up 200.62 per cent on year and up 19.44 per cent as compared to April 2019. The value of non-petroleum and non-gems and jewellery exports $23.51 billion, up 164.28 per cent and up 19.89 per cent from in April 2019. Oil imports were $10.8 billion, up 132.26 per cent YoY. However, it contracted 6.62 per cent from April 2019.
“The recent surge in Covid-19 cases has posed risks to the growth but we remain hopeful of continued recovery during the year. The WTO has also revised its projection upward and expects the global trade volume to increase by 8% in 2021,” Engineering and Export Promotion Council of India (EEPC) Chairman Mahesh Desai said.
Desai further said that localised lockdowns and night curfews announced by various state governments to contain a second wave of pandemic could cause shortage of workers and logistical issues. However, this could be a short-term problem, Desai added.