India’s outbound shipments contracted for the second month in a row in November after posting positive growth for just one month in September as the second wave of the coronavirus pandemic hit consumer demand in India’s largest markets. in Europe.
Exports fell 9.1% while imports contracted 13.3%, resulting in a high 10-month trade deficit of $ 10 billion, according to preliminary data released by the Commerce Ministry.
The main export items that dragged growth include petroleum products (-61%), engineering goods (-8.3%), chemicals (-8.1%), ready-made garments (-1.2%), while pharmaceutical products (11.1%) ), gems and jewelry (4.1%)%), electronic goods (1%) registered positive growth. The items that drove imports and the trade deficit include crude oil chemicals (36.1%), electronic products (12.3%), fertilizers (29.3%) and gold (2.7%).
India’s merchandise trade has weakened even before the covid-19 pandemic hit the economy and external demand. In 15 of the last 17 months as of June 2019, the country’s exports have been negative. 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 21% in the June quarter. The WTO now projects that the volume of world merchandise trade will decline by 9.2% in 2020, followed by a 7.2% increase in 2021. In April, the trade body had projected that world merchandise trade would fall between a 13% and 32% in 2020 due to the pandemic.
The rate of contraction of the Indian economy slowed in the September quarter to 7.5% from a record high of 23.9% contraction in the June quarter. While some research agencies have revised up their GDP forecasts for India, S&P Global Ratings on Monday stuck to its previous forecast of a 9% drop in GDP in fiscal year 21 and expects more evidence of a sustained recovery in economic activities. “While there are now upside risks to growth due to a faster recovery in population mobility and household spending, the pandemic is not completely under control. We will wait for more signs that infections have stabilized or slowed, along with high-frequency activity data for the third quarter of the fiscal year, before changing our forecasts, “he said on Monday. The OECD projected on Tuesday that the Indian economy would slow down. will contract 9.9% in FY21, citing sluggish household consumption and investment growth largely unresponsive to more favorable monetary conditions.
Separately, the Minister of Commerce, Piyush Goyal, chaired the meeting of the Board of Trade on Wednesday, in which the strategy to be adopted to boost manufacturing and domestic exports was discussed within the framework of the next Foreign Trade Policy for the five-year period 2021-26. The Board of Trade is made up of state trade ministers, secretaries of key ministries, and export promotion councils, among other officials.
Goyal called for moving beyond traditional thinking about trade, which focuses on government and government schemes, and moving towards supporting freer trade. “Trade must build on India’s strengths in quality, cost competitiveness, economies of scale, and leverage our comparative advantages like manpower. Looking ahead, we have every chance of achieving the export target of $ 1 trillion by 2025 and the GDP target of $ 5 trillion, “he added.
.
