According to data released by the commerce ministry on Monday, India’s merchandise exports increased by just 0.67 percent in February, while imports increased by 7 percent, resulting in a 12.6 billion trade deficit for the month.
The ministry published preliminary data on March 2, that indicated a 0.25 percent drop in exports for the month. Merchandise exports dropped 12.23 percent between April 2020 and February, while merchandise imports fell 23.1 percent, resulting in an $84.6 billion trade deficit over the 11-month period.
Petroleum products (-42%), gems and jewellery (-34%), and engineering goods (-8%) all saw declines in February, although pharma product shipments increased by about 16 percent. Petroleum (-16.6%) and transportation machinery (-23%), on the other hand, saw substantial increases in imports of gold (124%), electronic goods (38%), and chemicals (37.6%).
The World Trade Organization said in February that due to good fourth-quarter trade results, the decline in global trade volume in 2020 may be “slightly less serious”, than its previous estimate of 9.2 percent, while prospects for 2021 and beyond were uncertain as new Covid-19 variants emerged. Even before the pandemic hit the nation, India’s merchandise trade was deteriorating, and external demand.
Since June 2019, exports have decreased in 15 of the last 20 months. Exports and imports have been falling in double digits since March 2020, also temporarily leading to a trade surplus in June for the first time in 18 years. However, the government’s statistics office forecasts a deeper contraction of 8 percent in the fiscal year 2021, compared to an earlier projection of 7.7 percent.
Following two quarters of unprecedented contraction due to the corona virus pandemic, India’s economy recovered in the December 2020 quarter, growing at 0.4 percent, suggesting that Asia’s third-largest economy is on the mend. The Organisation for Economic Co-operation and Development (OECD) forecasted that India’s economy would expand at a rate of 12.6 percent in FY22.
