India’s export growth prospects are likely to get a boost from the World Trade Organization’s (WTO) latest report that now sees a brighter global merchandise trade outlook for 2021 compared to its earlier projections. India’s exports to its top trading partners such as the US, European Union, nations in West Asia, among others, are expected to rise. Exports data during the first six months of the current fiscal year is emblematic of the fact that external demand has been robust.
In the growing export rally, India was able to cross the $100 billion mark for the first time in exports in a quarter, although there has been a rise in the trade deficit as well due to rising imports. While the exports are still showing double-digit growth percentages, India is starting to face competition in several industries, as foreign suppliers recover from the effects of the pandemic. Exports may also face resistance with rising domestic demand as carry forward stocks have dropped in various markets such as in the cotton industry.
Total exports in the first half of 2021 have been $197 billion which is 57% higher than 2020’s first half, but it is still a long way to go for the government’s $400 billion targets for the full financial year.
The latest updates are discussed below:
As Thailand’s production rebounds, Indian sugar exports are set to face competition this season. (Source)
After having shipped out a record 7.3 million tonnes last season that ended the previous month, India is likely to export about six of sugar during the current new season (October 2020-September 2021). But Indian exporters will have stiff competition from Thailand, which is expected to rebound in the global market, besides Australia. “Thai sugar will give competition to Indian, especially due to the high freight differential ($15-$20) for destinations such as Indonesia. India needs to price its sugar to match Thai offers,” said Ravi Krishnamurthy, Head – Indian sugar- COFCO International.
India and Thailand, in particular, would be competing for the Indonesia market, which imported 1.7 mt of raw sugar from New Delhi. Indian production is likely to be around last season’s level, while an attractive cane price in Thailand is helping the farmers there to switch back to the sweet crop.
India’s quarterly exports cross $100 billion-mark for the first time. (Source)
In the first six months of the current financial year, exports from India touched $197 billion. The government has set a target of $400 billion for the financial year. India reported $101.89 billion in exports in the quarter ending September. In September alone, the exports stood at $33.44 billion, according to government data. In August, the figure was $33.28 billion. The highest export amount in the second quarter was recorded in the month of July ($35.17 billion).
Cotton exports could fall as local demand rises: Report. (Source)
India’s cotton exports could fall by 36% in 2021-22 from a year ago, as domestic demand has been rising amid limited supply after carry-forward stocks nearly halved from a year ago. Lower exports from the world’s biggest cotton producer could support global prices, which jumped to their highest levels in a decade on strong demand from top consumer China.
Exports could go down to 5 million bales in the new season since local demand has been rising. The country exported around 7.8 million bales in 2020-21, the highest in eight years. Higher exports and local demand have depleted carry forward stocks to 6.5 million bales in the new season that started on October 1, from 12.5 million bales a year ago.
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India’s merchandise exports grow 21.3% year-on-year in September. (Source)
India’s merchandise exports grew 21.3% year-on-year to $33.44 billion in September, and were 28.5% higher than pre-COVID levels of September 2019. Merchandise imports however grew faster to $56.38 billion, 84.75% higher than September 2020 and nearly 50% over pre-pandemic levels, as per preliminary estimates.
Total merchandise exports in the first half of the year now stand at $197.11 billion, nearly 57% higher than 2020 and 23.8% over 2019. This means exports will have to see a further pick up over the rest of the year in order to meet the government’s $400 billion target for 2021-22. The trade deficit hit a record of nearly $23 billion in September, and the overall trade deficit in the year so far now stands at 78.81 billion, almost 207% higher than a year ago, but still 11.4% below 2019 levels.
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