Value of India’s merchandise exports slowed down to $6.4 billion in the second week (8-14) of June against $7.7 billion registered in the first week of the month, according to tentative data released by the commerce ministry. Thus, during the first half of the month (1-14 June), exports grew 46.4% from the year-ago period to $14.1 billion. Non-petroleum exports increased 43.8% during the same period in June. If the current trend continues, exports may drop to below $30 billion in June. Exports have remained above $30 billion for three consecutive months starting March, when shipments hit a record $34.45 billion. Provisional data released by the commerce ministry on Tuesday showed India’s exports in May grew 69.3% to $32.3 billion while imports rose 73.6% to $38.6 billion over a low base a year ago, resulting in an eight-month low trade deficit of $6.3 billion. Early recovery in the US and Europe due to the decline in coronavirus cases overseas and faster vaccination is fuelling demand for Indian goods.
Exports are expected to support growth in FY22 by providing a cushion against the sharp correction in domestic demand due to cautious consumer sentiment on the back of rising health costs during the ongoing second wave of the pandemic. The value of imports stood at $10.5 billion during the second week of June against $9.1 billion in the first week of the month. During the first two weeks of the month, imports thus touched $19.6 billion leading to a trade deficit of $5.5 billion during the period. Top countries to which exports increased include the United Arab Emirates (184.7%), US (40.4%) and Italy (171%). Similarly, top countries from which imports rose include Iraq (342%), Saudi Arab (356%) and China (47.6%).
Trade minister Piyush Goyal has set an ambitious target of $400 billion of exports for FY22 against $290 billion in FY21, identifying pharmaceuticals, engineering goods, auto components, fisheries and agricultural goods as the key focus areas. The prospects of a quick recovery in world trade have improved as merchandise trade expanded more rapidly than expected in the second half of last year, the World Trade Organization (WTO) said. The volume of world merchandise trade is expected to increase by 8% in 2021 after falling 5.3% in 2020, continuing its rebound from the collapse following the coronavirus outbreak that bottomed out in the second quarter of last year, according to new estimates from the WTO.