India posts highest growth of intermediate goods imports in Q3 CY2021 globally, says WTO note

India posted the highest growth globally in imports of intermediate goods in the third quarter of 2021 (July to September 2021), registering a rise of 65 per cent (year-on-year) to $81 billion, mainly due to high imports of non-monetary gold, according to the World Trade Organisation (WTO).

China’s import of intermediate goods — inputs that go into the production of a final product — increased at a more moderate rate of 25 per cent in Q3 2021, but it was the highest importer of such goods at a value of $443 billion, as per the information note on trade in intermediate goods published by the WTO on Friday. Beijing was also the top exporter of intermediate goods valued at $382 billion in the period, a growth of 36 per cent.

“Although at a slower pace than in the second quarter of 2021, exports of intermediate goods kept on increasing in all regions in the third quarter, at between 20 and 45 per cent year-on-year, with a world average of 27 per cent (to $2,502 billion),” the note said.

Sector-wise growth

The high growth rate of other industrial supplies at 38 per cent to $1,225 billion, comprising almost half of exports of all intermediate goods, outlined the rebound of activity within manufacturing supply chains, the note said. It was supported by intensive exchanges of raw and semi-processed metals (copper, iron, steel, aluminum) as well as trade of inputs for medical goods.

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Vaccines were the top exported intermediate goods in the category of industrial supplies valued at $ 40.5 billion, accounting for 1.6 per cent of total intermediate exports in Q3 2021. Belgium, which counts vaccine products as its most traded intermediate good posted the largest growth, recording a 46 per cent rise in exports in the third quarter following a 64 per cent increase in the second quarter.

World exports of transport equipment parts and accessories, however, grew more slowly at 8 per cent year-on-year in the third quarter compared with 69 per cent in the second quarter. The rise in intermediate goods exports of ores and minerals also slowed to 16 per cent compared with an average growth of 47 per cent during the first half of the year. This was partly due to falling iron ore prices in September 2021, the note said.

Supply chain activity

Trade in intermediate goods is an indicator of the activity in supply chains, which were severely impacted in the early stages of the Covid-19 crisis, the note said. Things, however, seem to be improving. The share of intermediate goods in total trade (excluding fuels) in Q3 2021 was 53 per cent, a ratio that has remained constant over the last decade.

India showed the highest growth in intermediate imports for the third quarter running which could be largely attributed to the upward momentum of import of non-monetary gold which grew 161 per cent, it said.

Japan’s imports showed the second highest increase among the top intermediate goods importers (42 per cent), a rise that could be noted for a wide range of industrial inputs, reflecting the high level of industrial activity in the economy, it added.

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