India’s merchandise exports expand 6.16% in January, bringing down the trade deficit to USD 14.54 billion.
Increase In Merchandise Exports
Merchandise exports from India stood at USD 27.45 billion as against last year’s USD 25.85 billion. Exports have expanded for the second consecutive month in January. The data released by the government revealed a robust growth in the exports of non-oil and non-jewellery segments. Also, exports of key sectors, including engineering and electronic goods, registered double-digit growth. In contrast, petroleum product exports came down 32.1% at $2.16 billion, and Gems and Jewellery’s exports decreased by 1.3% at $2.84 billion. However, exports of engineering goods registered a positive growth of 18.8%, reaching USD 7.39 billion. Also, readymade garment exports declined by 10.73%.
Imports During April-January 2020-21
On the other hand, India imported goods worth USD 41.99 billion (Rs.3,06,951.56 crore) against imports of USD 41.15 billion in January 2020. This is an increase of 2.03%. Further, the cumulative value of imports during April-January 2020-21 was USD 300.26 billion, USD 105.07 billion less than last year’s imports during the same time. While oil imports were down 27.7% at $9.40 billion, non-oil imports rose 15.8% at $38.50 billion. Also, gold and electronic goods imports increased by 154.7% and 17.4% respectively.
Domestic Demand Recovery
Commenting on the data, Aditi Nayar, principal economist, ICRA Ratings, explained that a decrease in trade deficit is evidence of domestic demand recovery. Further, he added that the Indian economy is all set to return to a current account deficit in Q3 and Q4 of FY21. Also, he warned that crude oil prices would exceed year-ago levels. Besides, gold imports may diminish as the wedding season draws to a close.
In all, India’s exports grew the third time this fiscal year, which signifies resurgence in global demand. Indian exporters have reported an increase in enquiries from major markets of US and Europe.