India’s exports shrank by 36.47 per cent, recovering significantly from a 60 per cent contraction in the previous month.
After the coronavirus pandemic-led global lockdown severely hit India’s exports in the month of April, the exports once again contracted in the month of May. India’s exports shrank by 36.47 per cent, recovering significantly from a 60 per cent contraction in the previous month, according to the ministry of commerce. Exports in May 2020 were USD 19.05 billion, compared to USD 29.99 billion in May 2019, and USD 10.36 billion in April 2020. Except for iron ore, drugs & pharmaceuticals, spices, and rice, exports of all other commodities registered an on-year contraction in May 2020.
Exports of leather & related products fell 75.07 per cent, gems & jewellery fell 68.83 per cent, and petroleum products plunged by 68.46 per cent on-year. Non-petroleum and non-gems and jewellery exports in May 2020 were USD 16.36 billion, showing a contraction of 23.61 per cent.
A major fall in the domestic demand amid the nationwide lockdown, coupled with travel restrictions on international cargo flights, also led to a severe fall in May’s imports. Imports in May 2020 more than halved to USD 22.20 billion. The lockdown almost paralysed the gems and jewellery sector, which is also indicated by 98.4 per cent fall in gold imports in the month of May. Travel restrictions and slow industrial activities also hit the fuel demand, causing nearly 72 per cent contraction in the imports of petroleum and crude products. The imports of coal, electronic goods, and machinery also fell up to 45 per cent on-year.
On the back of Due to a higher contraction in imports, compared to exports, India’s trade deficit narrowed sharply to USD 3.15 billion in May 2020 from USD 15.36 billion in the same month last year. The trade deficit in May is at the lowest level since February 2009. India’s trade deficit was over USD 15 billion in January 2020, however, weak business and industrial activities, coupled with the coronavirus pandemic led to a continuous fall in trade. Since India’s imports fell faster than exports, the balance of trade also kept reducing.