The Indian exports have risen nearly by 50 percent year on year in the first 9 months of this fiscal year and have put the nation on track to hit the target of $400 billion in merchandise exports. The imports have also increased sharply during the same period which has led to a sharp uptick in the Indian Fiscal Deficit. The nation is pursuing various new FTAs (Free Trade Agreements) for the expansion of opportunities for the Indian exporters.
The Indian exports between April and December 2021 hit $301.4 billion, 49.7 increment year on year and 26.5 percent over exports during the same period in the year 2019. The key contributors in the export growth in December have been two traditional sectors namely petroleum products which have contributed a 152 percent increase and gems and jewelry that have contributed a rise of 16.2 percent in India’s exports.
India’s exports have also increased due to the increase in a worldwide rise in trade with global merchandise trade posting a quarterly record of $5.6 trillion in Q3 of 2021 as per the report by the United Nations Conference on Trade and Development. The global trade in both goods and services in 2021 is estimated to be around $28 trillion which is 23 percent higher than 2020 and 11 percent when compared to the pre-Coronavirus levels.
Besides the petroleum and gems and jewelry exports, Engineering goods including iron and steel products, organic and inorganic chemicals, and textile products such as fabrics and cotton yarn have been the important contributors to the export growth in this fiscal.
Exports of Indian engineering goods grew by 38.4 percent in December and rose to $9.8 billion from $7.1 billion a year ago. The exports of electric goods increased by 34 percent and rose up to $1.7 billion and the organic and inorganic chemicals increased by 27 percent in the same period and increased to $2.7 billion.
President of FIEO (Federation of Indian Exports Organization), A Sakthivel has stated that the trend in the growth of Indian exports will most likely continue because it is benefiting from the positive sentiment internationally. He further added that Indian exports have been understanding the market requirements and have been upgrading their products accordingly.
The outbreak of Coronavirus led to disruptions in supply in competitive markets such as Vietnam have also contributed to the increased demand for Indian exports. The Indian services’ exports have risen by an estimated 18.4 percent increasing to $177.7 billion in the first nine months of the fiscal year.
Indian merchandise imports have grown more rapidly than the exports at 68.9 percent year on year in the first nine months of the current fiscal year and have gone up to $443.8 billion from $262.8 billion in the previous fiscal year. The key imports include petroleum and petroleum products, gold, and electronic goods so far. Other contributors such as higher imports of machinery, electronic goods, vegetable oil, coal, and chemicals were the reason for the sharp increase in imports in the first 3 quarters of the fiscal year.
The rise in imports has led to a rise in the trade deficit to $142.4 billion in the period between April – December period. The Indian Trade surplus is estimated at around $74.4 billion in the first 3 quarters. According to experts, India’s current account deficit for the fiscal is expected to be $40 to $45 billion.
