Apart from China, the exports surged in other east Asian economies too, which constitute nearly 16 per cent of Indian export basket.
Even as India boycotts China on various fronts after the face-off between soldiers at the Galwan valley, the dragon is buying Indian goods at full force. India’s exports to China rose 78 per cent on-year in June 2020, said a Crisil report. From a contraction of 60.2 per cent on-year in April, exports from India improved to a contraction of 10.2 per cent in July. The reason is a sharp rise in exports to economies that have been able to control the coronavirus pandemic. Apart from China, the exports surged in other east Asian economies too, which constitute nearly 16 per cent of Indian export basket.
These include Malaysia (76 per cent), Vietnam (43 per cent), and Singapore (37 per cent). Most of these economies had flattened the Covid-19 curve in this period. On the other hand, the exports declined to western economies such as the United States, Brazil, and United Kingdom, on the back of high coronavirus cases.
The report suggested that the exports will rise to countries that have controlled their caseload and restarted activity and China is a case in point. It highlighted that China entered and controlled the pandemic much earlier than other economies as its cases peaked in February, post which economic activities resumed. While most of the economies are slipping into a recession, China’s GDP grew 3.2 per cent on-year in the April-June quarter.
Meanwhile, industrial commodities such as iron and steel, ores, and organic chemicals were the key drivers behind the double-digit growth of India’s exports to China. However, India’s imports from China have fallen due to weaker domestic demand and import restrictions. This sharp rise in exports relative to imports has significantly brought down the trade deficit with China as well. The polarised growth in exports have also indicated the severity of the coronavirus cases on the country’s overall economy.