Despite localised lockdowns across the region, merchandise exports and imports remained strong in April, indicating increased foreign and domestic demand for goods, leaving a four-month high trade deficit of $15.2 billion.
The commerce ministry published preliminary data on Sunday showing that merchandise exports increased by a record 197 percent to $30.21 billion in April, while merchandise imports increased by 166 percent to $45.45 billion. To be sure, this increase is higher than the low point reached last year, when India imposed a national curfew that disrupted supply chains and harmed both, imports and exports.
India’s exports and imports were $10.36 billion and $17.12 billion, respectively, in April 2020. The trade output in April of this year, however, was softer than the March print. Exports and imports both reached new highs in March, totalling $34.45 billion and $48.38 billion, respectively.
Non-oil exports increased 201 percent to $26.85 billion in April, with engineering, gems and jewellery, and textiles shipments leading the way, while non-oil imports increased 179 percent to $34.65 billion, with gold, electronic products, and vegetable oil sectors leading the way.
The impressive rise, according to Sharad Kumar Saraf, president of the Federation of Indian Export Organizations, confirms his assessment that exporters’ order booking position is extremely strong, and that with the gradual improvement of the country’s situation, exports will continue to expand. Moreover, Sharad Kumar Saraf said, “Growth in labour-intensive sectors such as gems and jewellery, handicrafts, and carpets bodes well for the job situation, which is especially important in the current context”.
The World Trade Organisation (WTO) said last week that the chances of a strong turnaround in global trade have increased because merchandise trade grew faster than anticipated in the second half of last year. The amount of global merchandise trade is projected to increase by 8 percent in 2021, after falling by 5.3 percent in 2020, according to new World Trade Organization projections, continuing its recovery from the pandemic-induced downturn that peaked in the second quarter of last year
The remarkable success of the engineering goods sector in recent months, according to Engineering Export Promotion Council chairman Mahesh Desai, is encouraging for exporters who were badly hit last year. Localized lockdowns and night curfews declared by various states to contain a second wave of pandemic, could result in a labour shortage and logistical problems, but these should only be a temporary issue. We haven’t given up hope for a full recovery.
Many states have announced localised lockdowns and night curfews as a result of the escalating coronavirus cases across the region, which is expected to delay a strong recovery in domestic economic activity.
The deadly second wave of Covid-19 has brought an abrupt halt to India’s nascent economic recovery from the pandemic, according to Brickwork Ratings, which revised its 2021-22 economic growth outlook for India to 9 percent from 11 percent previously. Last week, the rating agency Standard & Poor’s predicted that a long-running Covid-19 epidemic, with regular cases breaking new records, would stymie India’s economic recovery.
