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India’s exports to the US — the country’s largest outbound destination for goods — suffered a blow due to the Covid-19 pandemic in calendar year 2020 with outbound shipments declining 11.3 per cent to $51.13 billion compared with 2019. But things are on a mend as December exports have posted a rise of 14.2 per cent (year-on-year) to $4.89 billion, as per government figures.
Imports from the US in January-December 2020 posted a sharper decline of 20.1 per cent to $27.39 billion, which increased India’s trade surplus by 1.4 per cent to $23.79 billion.
“In December 2020, Indian exports to the US registered the largest monthly year-on-year increase with 14.2 per cent growth. December also marked the fourth consecutive month of positive growth, indicating a strong recovery in trade,” according to monthly commercial report for December by the Embassy of India in Washington DC.
The export items which posted sharp increases in December 2020 include art of stone, plaster, cement, asbestos; food industry residues; oil seeds, miscellaneous grains, seeds; wadding, felt, twine and ropes; toys, games and sport equipment; ceramic products, and products of animal origin.
‘Robust recovery’
Indian exporters, too, have reported an increase in enquiries and demand from the major markets of the US and the EU, which has given them hope for the future after suffering months of battering due to a decline in global demand.
According to a recent assessment done by the Engineering Export Promotion Council, which has 60 per cent of its members from the MSME sector, the past few months have shown a robust recovery in the external demand from the major markets of the US and Europe.
“Unlike what has been observed in previous months, Indian exports, showing strong growth in December 2020, are not replacing existing market shares in the US as there was commensurate increase shown in the imports of these products from the rest of the world,” the Indian Embassy report observed.
The Indian exports to the US which registered significant decline in December 2020 include lead and articles, apparel and accessories, footwear, explosives, and railways and tramways equipment.
The US connect
In the top 10 product groups where Indian exports saw a significant decline, the US saw a decline in global imports in nine of the same product groups, indicating that India underperformed due to a significant decline in US demand, the report stated.
India’s overall exports in April-January 2020-21 declined 13.58 per cent (year-on-year) to $228.25 billion while its exports in January 2021 increased 6.16 per cent to $27.45 billion compared with the same month last year, as per figures recently released by the Commerce and Industry Ministry.
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