New Delhi: Outbound shipments from India turned positive for the first time in seven months, with merchandise exports growing by 5.3% in September, mainly driven by the rebound in external demand for goods in sectors such as engineering, petroleum, pharmaceuticals and clothing.
mint It was the first to report on September 25, citing provisional figures, that exports have turned positive in the first three weeks of September, growing 8.3%.
Preliminary data released by the Ministry of Commerce ahead of schedule showed that exports grew 5.3% to $ 27.4 billion, while imports contracted 19.6% to $ 30.3 billion, leaving a trade deficit of $ 2.9 billion. Thus, in the first of the financial year (April-September), exports fell 21.4% to $ 125.1 billion while imports contracted 40.1% to $ 148.7 billion, creating a deficit $ 23.6 billion trade. Non-oil and non-gold exports increased 11.1%, while non-oil and non-gold imports fell 13.3% in September.
Aditi Nayar, chief economist at ICRA, said the growth of merchandise exports in September is encouraging after the faltering trend of the previous month. “Regardless, the marked gap in imports of non-oil and non-gold goods remains a cause for concern regarding the strength of domestic demand,” he added.
Among the major countries, exports to China (20.8%) and the US (15.5%) grew at the fastest pace in September, while India’s imports from most major economies contracted by September, including China (10.1%).
India’s merchandise trade has weakened even before the pandemic hit the economy and external demand. In 13 of the last 15 months, as of June 2019, India’s exports have been in negative territory. However, since March this year, both exports and imports began to decline by high double digits, even temporarily leading to a trade surplus in June for the first time in 18 years.
Data compiled by the World Trade Organization (WTO) showed that world merchandise trade declined by 21% in the June quarter. “By comparison, the drop in merchandise trade values during the financial crisis was deeper with a 33% drop in the second quarter of 2009,” he said. In April, the WTO had projected that world merchandise trade would fall between 13% and 32%. in 2020 due to the pandemic.
India’s economy contracted 23.9% in the June quarter, hit by the double whammy of a contraction in demand and a supply shock due to a nationwide lockdown considered the tightest in the world.
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