Owing to a severe low base effect, India's merchandise trade shot up by a massive 193.63 percent in April, after a large rise of 60 percent in March.
Data released by the Commerce and Industry Ministry on 14 May showed outbound trade rose to $30.63 billion in April, 2021 from $10.36 billion in April, 2020.
The large rise is due to the extremely low volume of trade beginning in March, last year when the nationwide lockdown had been instituted. Trade had been among the first industries to be hit in the initial days of the pandemic, after a nationwide lockdown was announced on March 23. However, the impact of lockdown in other nations had already begun, thus adversely affecting shipping flows even before that.
After a difficult year, exports had however began rising since December. In February, before the low base effect kicked in, growth had been a marginal 0.67 percent.
All major export segments such as Processed petroleum, electronics, engineering goods, gems & jewellery, textiles and pharma saw major growth in April. Exporters say that there has been a continued revival not only in the order booking positions but also in the demand from across the globe.
“As vaccine coverage rises in Europe and North America we see further increase in demand. Shipments to China have already been quite healthy and we expect the trend to continue,” EEPC India Chairman Mahesh Desai, said.
However, he said pending issues such as lack of clarity on Remission of Duties and Taxes on Export Products (RoDTEP), Merchandise Exports from India Scheme (MEIS) and Inverted duty structure continue to hold back the sector.
Imports also rise
In April, imports saw an equally large rise, going up by 167 percent to $45.72 billion. Imports had risen by 53.7 percent in March.
The largest part of the import bill - petroleum and crude oil - stood at $10.87 billion, slightly up from the $ 10.27 billion worth of imports in March. In the latest month, gold imports stood at $6.23 billion, down from $ 7 billion in March.
Commerce Secretary Anup Wadhawan said the figures represented a strong beginning for 2021-22. "Even if April, 2019 is considered as the base, the latest performance is significantly positive," Wadhawan said. He also pointed to a strong recovery in import growth as a sign of good trade performance to come.
India's trade deficit in April stood at $15.1 billion, up from $13.93 billion in the previous month of March. On a monthly basis, India's trade position has returned to the familiar deficit territory after witnessing a rare trade surplus of $800 million last year at the height of the COVID-19 pandemic-induced national lockdown. In March, it was $ 13.93 billion. Economists say that the trade deficit will continue to widen.