India’s merchandise exports and imports shot up more than 50% each in March over a lower base a year ago when coronavirus pandemic hit external demand for Indian goods, leading to $14.1 billion trade deficit during the month.
According to preliminary data released by commerce ministry, merchandise exports grew 58% to $34 billion and imports rose 53% to $48.12 billion in a month when global trade faced significant challenge due to the blockage of the Suez channel by the Ever Given vessel for a week. Indian exporters and importers use the Suez channel for trade worth $200 billion annually with North America, South America and Europe.
The high growth came over a low base when exports collapsed 35% and imports plummeted 29% as many countries in the world went for lockdowns including India to stem the spread of the coronavirus infection. However, in terms of value also, both exports and imports improved significantly when compared sequentially with February data. In February, exports and imports stood at $28 billion and $41 billion respectively.
“This is the highest ever exports in Indian history both in terms of value and growth,” a commerce ministry official said under condition of anonymity.
During March, non-petroleum exports rose 62% while non-petroleum and non-jewellery exports grew 61%. Exports were led by engineering goods (70%), gems and jewellery (76%) and drugs and pharmaceuticals (47%) while imports were led by a spurt in domestic demand for gold (584%) followed by electronic goods (77%) and machinery (60%).
Overall, exports in FY21 contracted by 7.4% to $290 billion while imports fell 18.1% to $389 billion during the financial year leading to a trade deficit of $99 billion.
The World Trade Organisation on Wednesday said prospects for a quick recovery in world trade have improved as merchandise trade expanded more rapidly than expected in the second half of last year. According to new estimates from the WTO, the volume of world merchandise trade is expected to increase by 8% in 2021 after having fallen 5.3% in 2020, continuing its rebound from the pandemic-induced collapse that bottomed out in the second quarter of last year. “The relatively positive short-term outlook for global trade is marred by regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries. COVID-19 continues to pose the greatest threat to the outlook for trade, as new waves of infection could easily undermine any hoped-for recovery,” WTO said.