After six months of continuous fall, India’s goods exports posted a 5.27 per cent growth in September 2020 (year-on-year) to $27.4 billion, with crucial sectors such as readymade garments, engineering goods, petroleum products, pharmaceuticals and carpets on an upswing.
Some exporters, however, feel it may be too early to celebrate, as the global economic outlook continues to be grim, while others say that the increase in buyer enquiries must translate into business with adequate support from the government.
Pain points
An area of concern is that exports from major labour-intensive sectors such as gems & jewellery, marine products and leather & leather products continued to decline.
India’s imports in September 2020 declined 19.6 per cent to $30.31 billion, shrinking the trade deficit to $2.91 billion compared to $11.67 billion in September 2019, as per preliminary data released by the Commerce & Industry Ministry on Friday.
“While the reversal in trend for merchandise exports turning into positive territory in September 2020 is a matter of relief, the challenges in the external trade would continue given the present state of global health emergency and its economic impact on the major economies,” said Mahesh Desai, Chairman, EEPC India.
Exporters body FIEO pointed out that there was an increase in enquiries from buyers in different countries, which was a positive indicator, but said the government needed to support the sector with incentives.
“The urgent need is to address some of the key issues including the release of the MEIS benefits, resolving risky exporters issues, early introduction of RoDTEP across all sectors, capping of ₹2-crore MEIS, introduction of NIRVIK scheme and expediting introduction of the e-wallet scheme, which will further help in reviving the exports during these difficult and torrid times,” FIEO said in a statement.
Other sectors which posted an increase in exports in September 2020 compared with September 2019 include iron ore, rice, other cereals, ceramic products and glassware, oilseeds, meat, dairy & poultry, handloom, tobacco and spices, as per the data.
“Make in India, Make for the World: Indian merchandise exports grew 5.27 per cent in September 2020 as compared to last year. Another indicator of the rapid recovery of Indian economy as it surpasses pre-Covid levels across parameters,” Commerce & Industry Minister Piyush Goyal had tweeted late on Thursday, disclosing the export figures.
Gold, silver imports down
Major commodities which posted a decline in imports in September 2020 over September 2019 are gold, silver, transport equipment, newsprint, leather and leather products and sulphur & unroasted iron parts.
Exports during April-September 2020-21 were at $125.06 billion, posting a fall of 21.43 per cent over the same period last year. Imports during April-September 2020-21 were at $148.69 billioncompared to $248.08 billion during the same period last year, a fall of 40.06 per cent.
Exports from India have been falling (year-on-year) since March 2020 when the government announced a national lockdown to check the spread of Covid in the country.
In March 2020, India’s goods exports fell 34.57 per cent compared to the same month last year, while in April, the fall was much steeper at 60.28 per cent.
In subsequent months, the severity of the decline in exports reduced as the world tried to get back to work; August 2020 witnessed a lower decline of 12.66 per cent to $22.7 billion.