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Goods exports posted a marginal 0.14 per cent growth in December at $27.15 billion raising hopes amongst exporters of a revival as major items such as gems & jewellery, electronics, chemicals, carpets, handicrafts, engineering goods, cereals and pharmaceuticals registered a rise.
Imports during the month grew at a steeper 7.56 per cent to $42.59 billion, propelled by gold, pulses, chemicals, machine tools, and project goods, resulting in the widening of the trade deficit to $15.44 billion compared to $12.49 billion in December 2019.
Order book
“Marginal growth of 0.14 percent (in December 2020) shows signs of a revival as order book positions have continuously improved. More new orders are also in the offing,” said Sharad Kumar Saraf, President, FIEO.
Arrival of vaccines, too, have helped in boosting business sentiments for the sector which could translate into further growth in the coming months, he added.
Total exports for the period April-December 2020-21 fell 15.73 per cent to $200.80 billion while total imports fell 29.08 per cent to $258.27 billion.
Non-petroleum and non-gems and jewellery exports in December were 5.5 per cent higher at $ 22.22 billion, according to quick estimates of the April-December 2020-21 trade data shared by the Commerce & Industry Ministry on Friday.
“Notably, the export growth of non-petroleum and non-jewellery was positive at 5.5 per cent indicating pick up in manufacturing activity in the country,” said Prahalathan Iyer, Chief General Manager, Research & Analysis, Exim Bank of India.
Engineering goods
Another notable trend witnessed was positive growth in engineering goods exports, though it was marginal at 0.3 per cent, Iyer pointed out.
Engineering goods exporters, however, say rising steel prices could be a dampner as global uncertainty remains. “Exporters continue to face head winds of extreme nature,as the key economies of the world are in the midst of a demand recession. The domestic scenario of rising cost of raw material like steel aggravates the situation,” said Mahesh Desai, Chairman, EEPC India.
Engineering goods are a major contributor to the country’s trade basket accounting for almost 25 per cent of total exports.
Trade deficit in the first nine months of the fiscal at $57.47 billion was much lower than the trade deficit of $125.91 billion in April-December 2019-20.
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