Imports too grew in May 2021 by 73.64 per cent to USD 38.55 billion, from USD 222 billion in the same month a year ago -- leaving a trade deficit for the month being reviewed at USD 6.28 billion.
India’s exports rose by 69.35 per cent to USD 32.27 billion in May on account of healthy growth in sectors such as engineering, petroleum products and gems and jewellery, even as trade deficit dropped to an eight-month low of USD 6.28 billion, according to government data released on Tuesday.
Exports stood at USD 19 billion in May last year and at USD 29.85 billion in May 2019, the data showed.
Imports in May 2021 grew by 73.64 per cent to USD 38.55 billion, leaving a trade deficit of USD 6.28 billion for the month—the lowest in eight months. The deficit number lower than this was recorded at USD 2.91 billion in September 2020.
Imports in May 2020 were recorded at USD 22.2 billion and at USD 46.68 billion in the same month of 2019.
Trade deficit in May 2020 was USD 3.15 billion.
Exports during April-May this year jumped to USD 62.89 billion from USD 29.41 billion in the same period of 2020.
Imports during April-May 2021 came in at USD 84.27 billion, an increase from USD 39.32 billion in the corresponding two months of 2020. The trade deficit during the period under review was USD 21.38 billion as against USD 9.91 billion in April-May 2019-20.
Oil imports during May 2021 rose to USD 9.45 billion from USD 3.49 billion in May 2020.
Gold imports increased to USD 679 million in May 2021 from USD 76.31 million in the same month a year ago.
Exports of engineering, petroleum products and gems and jewellery in May 2021 stood at USD 8.64 billion, USD 5.33 billion and USD 2.96 billion, respectively.
The other commodities which have recorded positive growth during May include handicrafts, leather, meat, dairy and poultry products, handloom, RMG (ready made garments) of all textiles, carpet, cashew, marine products, iron ore, plastic and chemicals.
Items which have registered negative growth are fruits and vegetables, oil seeds, pharmaceuticals, tea and spices.
Commenting on the numbers, Federation of Indian Export Organisations (FIEO) President S K Saraf said that continuing on with such a growth performance in exports during the second month of the new financial year shows signs of resilience of the exporting community.
“The government must address some of the key issues including priority status to the exports sector, extension of interest equalisation scheme beyond June 2021 till at least March 2024, resolving risky exporters’ issues and continuance of seamless refund of IGST,” he said.
Aditi Nayar, Chief Economist, ICRA, said that the widening state level restrictions shrunk the imports of crude oil and gold, narrowing the merchandise trade deficit to an eight month low in May 2021.
‘After the huge inventory build up in February-April 2021, the impact of the lockdowns on retail demand led to a sharp slowdown in gold imports. We are cautiously optimistic that domestic demand is resilient, and that fuel demand will bounce back in June 2021 as states unlock. Nevertheless, the current account balance may well revert to a muted, transient surplus in Q1 FY’2022, led by the drop in mobility and fuel demand in May 2021,” she said.
Prahalathan Iyer, Chief General Manager, Research and Analysis, India EXIM Bank, said that though the imports in April-May 2021 have grown by 114 per cent over the corresponding value for the previous year, in absolute terms it is lower than the import of USD 86.75 billion witnessed during April-May 2019.
“This could be attributed to the lockdown restrictions in many parts of the country, and low consumer demand,” he said.