After continuously rising since May, India’s exports fell for the first time in the month of August. Exports in August 2020 were $22.70 billion, which was $23.6 billion in July 2020 and $25.9 billion in August 2019, according to the Ministry of Commerce & Industry. The exports of cashew (-47.61 per cent), gems & jewellery (-43.28 per cent), and petroleum products (-39.91 per cent), took the maximum hit in August. The fall in exports and the rise in imports in comparison to July 2020, have contributed to expanding the fiscal deficit to a five-month high in the month of August.
The trade deficit for August 2020 was estimated at $6.77 billion, which was $4.8 billion in July 2020 and $13.86 billion in August 2019. The trade deficit in August is in line with the street estimates of $6.75 billion. Considering April to August, the trade gap narrowed to $20.72 billion from $77.25 billion a year earlier. While the exports fell 26.65 per cent, imports plunged 43.73 per cent.
India observed a fall in exports when the trade was expected to improve as the country steps out of the nationwide lockdown. However, many other economic indicators have also indicated a rollback in India’s economy due to the rising number of coronavirus cases and the supply disruptions due to the regional lockdowns.
Meanwhile, commerce minister Piyush Goyal recently said that other countries must give India equal access to their markets as trade relations between two countries rest on the pedestal of high reciprocity and equilibrium, and more countries are moving towards balanced trade. Piyush Goyal had added that businesses will not only get a large Indian market but can also leverage the market to get economies of scale. Speaking about global trade relations, the minister had underlined that India is not going to be a patient receiver of unfair trade practices, according to the Ministry of Commerce & Industry.