As the 2nd wave of the pandemic slowly gets under control, researchers and experts have started expecting a strong V-shaped recovery in Indian exports, which might be supported by easing of monetary and fiscal policies. The removal of lockdown restrictions and accelerated vaccination drives in the country is also expected to benefit demands in exports. The fact that much of the growth being observed now is coming from labour-intensive sectors such as Gems & Jewellery, Engineering goods, Cotton yarn, handloom products, Marine products, Spices, Carpets, and Man-made yarn augurs well for the job scenario as well. Out of 30 major product groups, 19 have either recorded impressive, 3-digit, export growth figures. Trade deficit has also dropped to an 8-month low as exports have jumped to USD 32.21 billion. Although there are still sectors that are being negatively affected such as wheat and sea food, both of which have seen a 10% drop.
We discuss some of the latest updates below.
Trade deficit slips to 8-month low in May as imports fall, exports jump to USD 32.21 billion (Source)
India’s Trade deficit stood at to $6.32 billion in May, an eight-month low, due to the low volume of imports. According to data released by Ministry of Commerce and Industry, exports remained above the $30 billion for the third month in row at $32.2 billion, driven by robust growth in petroleum, gems and jewellery, and engineering goods, which grew by 200%, 179% and 53% respectively. This was 67.39% more than what was recorded during the same month last year.
Imports, however, fell to their lowest in six months at $38.5 billion, but were 68.54 per cent more than May 2020. Oil imports rose to $9.45 billion. “India is thus a net importer in May 2021 with a trade deficit of $6.32 billion, an increase of 74.69 per cent over trade deficit $3.62 billion in May 2020 and reduction by 62.49 per cent over trade deficit $16.84 billion in May 2019,” the ministry said.
India 2021-22 wheat exports seen falling 10% on year amid COVID-19 shutdowns: sources (Source)
After exporting a record quantity of wheat in 2020-21, India’s overseas sales of the food grain during the current marketing year are seen declining 10% over the year as localized lockdowns are propping up export prices, sources told S&P Global Platts. India, the second-largest wheat producer, made a comeback as an exporter after several years as global prices climbed with inventories hitting a two-year low in 2020-21. Exports prices of Indian wheat may rise during the current marketing year following tight supply of crops across major trade centers. The Indian government has also been stepping up its purchases, now at 40.98 million mt of wheat, 13% higher on the year.
India’s average export prices are seen increasing in the current year as spot prices have already risen, traders said. In 2020-21, the average export price of Indian wheat was at $263/mt.
Exports up 12% in April, May despite pandemic (Source)
India’s exports touched $32 billion in May 2021- over 67% higher than May last year and almost 8% more than the corresponding periods in 2019- led by a rise in the shipments of engineering goods, oil products and iron ore.
Although export growth in May 2021 was slower than April, the combined increase still added up to over 12% giving the government the confidence that it is on course to achieve strong recovery in this segment of the economy, once the impact of the lockdown across a large number of states wears off in the coming months
India’s seafood exports slump by 10.88 percent amid sluggish global trade over COVID fears (Source)
The sluggish international trade caused by rising COVID concerns has taken its toll on the Indian seafood export sector. The country’s seafood exports contracted by 10.88 percent in 2020-21 as the volume declined from 12,89,651 tonnes in 2019-20 to 11,49,341 tonnes this financial year.
In 2019-20, India had exported 12,89,651 tonnes of seafood worth Rs 46,662.85 crore. The decline in terms of rupee value is 6.31 percent, while it is 10.81 percent in dollar value.
The leading importers were the USA, China, and the European Union, while frozen shrimp retained its position as the major export item followed by frozen fish.
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