Merchandise exports rose 6.2% in January from a year before, the highest since March 2019, and 0.1% higher than December, showed the data released by the commerce ministry on Monday. It also beats the ministry’s preliminary estimate of a 5.4% increase in exports for January, signalling a nascent recovery following the Covid-related disruptions.
Imports, too, recorded a second successive month of growth (2% year-on-year) in January but the pace of rise slowed from 7.6% in December 2020. Trade deficit narrowed to $14.54 billion in January from $15.44 billion in the previous month.
The data showed that exports rose to $27.45 billion in January, against $25.85 billion a year before. Imports increased to $41.99 billion last month from $41.15 billion a year earlier. Importantly, core exports (excluding petroleum and gem and jewellery), which reflects the competitiveness of the economy, grew an impressive 13.4% in January.
Similarly, non-oil and non-gold imports rose 7.5% last month. One third of the 30 key commodities registered growth. The data show the overall outbound shipments until January this fiscal remained 13.6% lower than a year earlier, while imports dropped at almost double the pace of 25.9%.
Hit by a Covid-induced lockdown that battered the supply side hard, exports have witnessed a roller-coaster ride this fiscal. Having risen by 6% in September 2020, the first expansion since February 2020, outbound shipments faltered by 5.1% in October and 8.7% in November before it witnessed a marginal rise in December.
Nevertheless, it’s an encouraging sign and can potentially sustain once business operations stabilise in the wake of the Unlock, analysts have said.
The exports of commodities that saw a sharp rise in January included cereals other than rice and wheat (344%), oil meals (258%), iron ore (109%), engineering goods (19%) electronics and drug & pharmaceuticals (16% each). However, exports of petroleum products dropped by 32% and garments by 11%.
Commenting on the rise in exports in January, Sharad Kumar Saraf, president of the exporters’ body FIEO, said it signals that our traditional and labour-intensive sectors of exports (except for apparels, leather, marine products and gems & jewellery) have passed the most challenging times.
Saraf also urged the government to soon notify the rates for the Remission of Duties and Taxes on Exported Products scheme, which will remove uncertainty from the minds of the trade and industry thereby forging new contracts with the foreigner buyers.