Led by engineering goods, gems and jewellery, and petroleum products, India’s exports rose 50.45% to $7.41 billion during August 1-7. Imports in the week rose 70% to $10.45 billion, leaving a trade deficit of $3 billion, tentative data released on Tuesday by the commerce and industry ministry showed.
The top export destinations were the US, UAE and Saudi Arabia while the highest rise in imports was seen from the UAE, China and Nigeria.
Outbound shipments of engineering goods increased 63.2% and petroleum products grew 145.3%. Gems and jewellery exports witnessed a growth of 121% whereas iron ore, oil meals, oil seeds saw the steepest decline in exports.
In the first four months of FY22, India’s merchandise exports were $130.56 billion, which is 32.64% of the $400 billion target set by the government for this fiscal and up 73.8% over the corresponding period last year.
Imports of oil in the first week of August rose 141% to $1.8 billion while those of electronic goods were up 31 % to $308 million. However, gold imports declined 12.48% to $100 million.
Non-petroleum, non-gems and jewellery imports- an indicator of the strength of domestic demand- grew 53.3%.
Freight concerns
The Trade Promotion Council of India (TPCI) said on Tuesday that increasing container freights would push the overall cost of domestic goods in the international markets, which would make it less competitive and hurt the country’s merchandise exports.
“New records have been hit in container freight spot rates of all carriers, as the Asia-Europe route continues to rise…The industry is worried that if this situation persists, there can be a 5-8% increase in the cost of goods from India,” the council said in a statement, adding that shipments will be postponed due to very high ocean rates and demand for Indian products would slow down due to high cost.
As per TPCI, exports to US from India has grown by more than 20% compared to the 2019 in the first quarter of 2021 (April- June period) but a change in trend is being observed with respect to exports, which now is more focused towards the proximate markets, where the container turnaround time is shorter and freight costs are affordable, compared to the long haul distances like Europe and US.
“If this trend continues, India might see a decline in the exports in coming months as these are major markets of our exports,” TPCI said.
Source:economictimes.com