India’s exports jumped 45.17 per cent to USD 33.14 billion in August on account of healthy growth in segments like engineering, petroleum products, gems and jewellery and chemicals, even as the trade deficit widened to USD 13.87 billion, according to the commerce ministry’s provisional data.
Imports in August rose 51.47 per cent to USD 47.01 billion, as against USD 31.03 billion in the corresponding month of 2020.
The trade deficit in August 2020 was USD 8.2 billion. It stood at USD 55.9 billion during April-August this fiscal as compared to USD 22.7 billion during the same period of the previous year.
Exports during April-August 2021 grew by 66.92 per cent to USD 163.67 billion, the data showed.
Imports during April-August this fiscal rose by 81.75 per cent to USD 219.54 billion.
Oil imports in August rose 80.38 per cent to USD 11.64 billion, while gold imports jumped 82.22 per cent to USD 6.75 billion.
Exports of engineering, petroleum products, gems and jewellery and chemicals rose by about 59 per cent to USD 9.63 billion, 140 per cent to USD 4.55 billion, 88 per cent to USD 3.43 billion, and 35.75 per cent to USD 2.23 billion, respectively.
Commerce and Industry Minister Piyush Goyal tweeted: “India galloping towards USD 400 billion merchandise export target for current financial year. 45 per cent growth in merchandise exports in August 2021 over same period last year. Big boost to local businesses in capturing global markets.”
Commerce Secretary B V R Subrahmanyam said the numbers reflect healthy growth.
“I am very confident of achieving the USD 400 billion exports target for this fiscal. It will be a solid 30 per cent jump,” he told reporters.
Asked about container shortage issues being raised by exporters, he expressed confidence about resolution of the matter in the next 3-4 days.
“Container issue is there in the world and here also.. The Cabinet Secretary yesterday held a meeting on this. Container rates have risen by 300-500 per cent.
“Today also a meeting was held in the shipping ministry. We are doing some things and I am confident that in the next 3-4 days some solutions will come out,” the secretary said.
Goyal would hold a meeting on the matter with different ministries next week as it needs the attention of ministries like railways and shipping.
There can be two types of solution for the problem—short-term and long-term, the secretary said, adding the long-term remedy includes increasing production of containers.
On this issue, Hand Tools Association President S C Ralhan suggested the government can ask shipping lines to import 1 lakh containers into India as rising prices would hurt the country’s exports.
“There is a huge congestion at Chinese and Los Angeles ports…due to COVID related restrictions. High rates are impacting our cost competitiveness,” Ralhan said, adding increasing shipping freights are also impacting the shipments.
Former president of the Federation of Indian Export Organisations (FIEO) S K Saraf too said the container shortage and prices issue would impact exports and the government should take some strong action to resolve the matter.
“Closed government-owned container factories should start work again as they can make 20,000-25,000 containers per month. Overall container production also needs to be increased,” Saraf said.
FIEO President A Sakthivel said the continuous growth in exports since March this year augurs well for the economy.
“Steady recovery in global trade added with the expectation of buoyant order booking position for the coming months has also led to such continuous growth in exports,” he said.
ICRA’s Chief Economist Aditi Nayar said with merchandise imports continuing to scale up, even as exports receded from their all time high, the trade deficit widened to a higher than anticipated USD 13.9 billion in August, marking a four-month high.
“We expect the current account to record a modest deficit of USD 4-6 billion in the ongoing quarter,” she said.