Merchandise exports shot up 45.8% in August to $33.3 billion y-o-y, supported by a conducive base, improved order flow from western markets and elevated global commodity prices. Exports also saw a 28% jump over the pre-Covid (same month in FY20) level, as a resurgence in advanced economies bolstered demand for goods. At $47.1 billion, imports, too, staged a smart rebound and grew 51.7% from a year ago and 18.2% from August 2019, signalling a broader trade recovery, according to the provisional estimates released by the commerce ministry on Tuesday.
Merchandise exports have now exceeded the pre-Covid level for six months in a row. Exports between April and August hit $164.1 billion, up 67.3% from a year ago and 23.3% from the same period in FY20. The provisional growth rates of both exports and imports are slightly higher than the ministry’s preliminary estimates released earlier this month. Trade deficit rose to a four-month high of $13.8 billion.
Of course, as analysts have pointed out, export growth had remained subdued even before Covid — outbound shipments rose about 9% in 2018-19 but again shrank by 5% in 2019-20. So, only a sustained uptick over the next few years would help India recapture the lost heights.
Importantly, core exports (excluding petroleum and gems and jewellery) rose 31.9% in August from a year ago, lower than the 46% growth in overall merchandise exports, mainly due to a rise in global crude oil prices and resurgence in gems and jewellery exports after last year’s decline. Nevertheless, the growth remains encouraging, given the supply challenges. Also, it was 28.7% higher than the level in August 2019.
Similarly, core imports (excluding petroleum and gold) rose 37.3% y-o-y and 4.3% from the pre-Covid level.
Brent crude prices surged by 58% in August from a year earlier.
Total goods imports in the April-August period stood at $219.6 billion, up 80.9% from a year ago but only 4.4% from the pre-Covid level. Among the key performers on the export front, outbound shipment of petroleum products surged by 144% in August, gems & jewellery 88%, engineering goods 59%, cotton yarn, fabrics, made-ups and handloom products 55% and electronics 32%.
Similarly, imports of metaliferrous ores and other minerals jumped by 238% in August, followed by iron and steel (109%), pearls, precious and semi-precious stones (93%), gold (82%), petroleum (81%) and coal (79%).