Indian exports shine at $95 billion in June '21 quarter

The story: India recorded the highest-ever exports of $95 billion during April-June 2021, up 85 per cent year-on year (YoY) and 18 per cent higher tha

Indian exports shine at $95 billion in June '21 quarter

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• The story: India recorded the highest-ever exports of $95 billion during April-June 2021, up 85 per cent year-on year (YoY) and 18 per cent higher than the first quarter of the fiscal year 2019-20. It was 16 per cent more than the previous highest Q1 exports of FY19 ($82 billion) and higher than the earlier peak of exports in Q4FY21 ($90 billion).
• India's exports: While China made itself an exports superpower, and regularly exports nearly $ 2.5 trillion worth of merchandise, India's exports have remained low at $300 billion or so. Now, the government is working towards achieving another all-time high of $400 billion merchandise exports target by the end of the FY2021-22. The Commerce ministry will work with relevant stakeholders to achieve this target.
• Details: The merchandise exports grew 47 per cent YoY to $32.46 billion in June, driven by a robust demand of engineering goods, petroleum products, and gems and jewellery in the external markets. It was despite the severity of the second wave of Covid-19. Sector-specific interventions, involvement of all the stakeholders and functioning of the government as a whole helped in achieving the growth.
• Targets for future: The government has expressed hope services exports in the next five years will touch $500 billion.

1. The $400-billion target for merchandise would be achieved by disaggregating the aim product and sector wise. The government will try to achieve a target of $500 billion in FY23 and $1 trillion merchandise exports annually by the next five years.
2. Several labour-intensive sectors had seen rapid export growth. The exports in the engineering goods sector rose by $5.2 billion over Q1FY20. Likewise, rice exports growth has remained positive since May 2020 and rose by 37 per cent in Q1FY22, compared to Q1 of 2019-20.
3. India’s merchandise imports in June was $41.86 billion, up 96.33 per cent YoY and 2.03 per cent as compared with June 2019. During the quarter ended June, imports more than doubled to $126.14 billion as compared to Apri-June 2020. However, it declined 3.05 per cent from $130.1 billion in April-June 2019.

• Net importer: As a result, India was a net importer in June, with a trade deficit of $9.4 billion, that widened by 1,426.6 per cent over the trade surplus of $0.71 billion in 2020. India was a net exporter in June 2020 due to the disruption caused by the pandemic. Non-oil non-gold imports jumped to $30.2 billion in June '21, from Rs $28.5 billion on average in the past two months, reflecting a pick-up in demand with the gradual unlocking as well as the high commodity prices.
• Encouraging: The sharp rise in non-oil exports was encouraging, reflecting the vaccine-driven revival in activity in many trading partners, as well as the higher prices of commodity exports. The sustenance of non-oil exports at an elevated level will be critical for a downward revision in our projection of a current account deficit of $23-28 billion in FY22.
• SEZs in India: Simplifying the Special Economic Zone (SEZ) rules is on the radar. Also in the works is notification for rates and how various sectors will be compensated for various taxes, as per the Remission of Duties and Taxes on Export Products (RoDTEP) scheme.

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