The decline in exports has been mainly due to the ongoing global slowdown, which got aggravated due to the current Covid-19 crisis.
India’s exports took a major hit in the month of March, shrinking by nearly 35 per cent on-year. The decline in exports has been mainly due to the ongoing global slowdown, which got aggravated due to the current Covid-19 crisis, said the Ministry of Commerce & Industry. The coronavirus led lockdown and disruptions hit the supply chain and demand in the sector to a large extent, resulting in the cancellation of orders, it added. Exports stood at USD 21.41 billion in March 2020, compared to USD 32.72 billion in March 2019.
Commodity groups that have recorded the maximum contraction during March 2020 are Oil meals (69.85 per cent), meat, dairy & poultry products (45.48 per cent), engineering goods (42.32 per cent), and gems & jewellery (41.05 per cent). For the full year in FY20, the exports have contracted by nearly 5 per cent on the back of a prolonged slowdown. The disruption in supply and demand due to global pandemic has hit the imports as well, which shrank by nearly 29 per cent.
For the merchandise trade, the deficit in FY20 stood at USD 152 billion, which was USD 184 billon in the previous fiscal. A major factor responsible for a lower trade deficit is the fall in imports, led by low consumer demand in India’s domestic market in the last fiscal. Slow good movements and low fuel prices in the second have of the fiscal resulted in low oil imports too. Oil imports in the last fiscal were USD 129.43 billion, which was 8.15 per cent lower on-year. Meanwhile, the current lockdown has completely stopped the movement of non-essential goods across the international borders as well as within the country. This is expected to make a further dent in the supply and demand conditions.