Of course, there were certain other raw materials, such as cotton and iron ores, that defied this trend and witnessed a healthy rise in January, partly due to seasonal factors and favourable base.
India’s overall merchandise exports to coronavirus-hit China may have risen by almost 24% year-on-year in January, aided by a favourable base, but growth in the outbound shipment of certain key raw materials/intermediate goods and food items, including organic chemicals, plastics and marine products, did falter during the month. This was the time when the world’s second-largest economy was struggling to contain the epidemic within its shores and the outside world was largely unfamiliar with its ferocity.
With the epidemic spreading its tentacles far and wide now, both within and outside China, prompting India to curb pharmaceutical exports, growth in its outbound shipments to the giant neighbour is all set to decline from February/March onwards, traders say.
Official data showed exports of organic chemicals to China dropped almost 15% y-o-y in January, dragging down such despatches in the first 10 months of this fiscal by 11.6% to $2.3 billion. Organic chemicals are India’s largest export product. Similarly, Indian exporters blame the fears of the epidemic in China and consequent drop in fish consumption there for lower marine product purchases by the Chinese. So growth in India’s marine product exports to China dropped to a mere 3% y-o-y in January. Still, thanks to the rapid growth up to December 2019, such exports recorded a 114% y-o-y jump in the April-January period.
Plastic exports crashed 43% in January, which exacerbated the fall in such shipments to China to 19% up to January this fiscal. Even iron and steel exports to China plunged by almost 40% in January, dragging down growth in such supplies to 98% up to January this fiscal.
Of course, there were certain other raw materials, such as cotton and iron ores, that defied this trend and witnessed a healthy rise in January, partly due to seasonal factors and favourable base. Having contracted for months, cotton exports rose 13.3% in January. Still, the exports in the first 10 months saw a contraction of 53%. Similarly, ore exports jumped 174% in January, pushing up such supplies by as much as 120% in the April-January period.
Earlier this month, India restricted the exports of 26 drug formulations and active pharma ingredients (APIs) – including paracetamol, tinidazole and metronidazole – to keep domestic supplies steady. The Indian pharmaceutical industry is both an exporter to as well as importer of bulk drugs (active pharmaceutical ingredients and intermediates that give medicines their therapeutic value) from China. As much as 68% of these raw materials were imported from China last fiscal.
India’s exports to China rose to $1.5 billion in January, against $1.2 billion a year before, partly due to a favourable base. In the April-January period, however, the growth was only 4.8% y-o-y to $14.4 billion.