March exports likely rose 58% due to low base effect, imports soared 52%: Preliminary trade data

Reuters

Owing to a low base effect, India's merchandise trade is expected to shoot up in March, according to preliminary data received by the Commerce and Industry Ministry. With $34 billion worth of exports, outbound trade rose 58.23 percent as compared to the March 2020, according to the initial statistics, reviewed by Moneycontrol.

Exports had grown for the third straight month in February, rising by a marginal 0.67 percent. As a result of the March figures, India's cumulative exports in 2020-21 are now expected to be $290 billion, down from $314 billion in the previous financial year.

A year back in March 2020, exports had fallen by a 34.5 percent to just $21.4 billion 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.

However, in what should come as good news for policymakers, non-oil, non gems (NONG) exports also increased in March, rising by 60.7 percent. While petroleum and processed gold and diamonds remain the biggest earners in India's export basket, they are prone to volatility and even subtle fluctuations in demand and supply. As a result, NONG exports are considered a clearer barometer of the export sector's health.

Engineering  goods, gems & jewellery and pharma saw the biggest rise in March.

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. But rising exports from China has led to the shortage of containers in the region as most of the empty containers are available only for exports from China. There have also been complaints of China paid hefty premiums to shipping lines and container companies for bringing empty containers back to China.

Imports rise

In March, imports saw an equally large rise, going up by 52.8 percent to $48.1 billion. But for 2020-21, imports totaled only $388.9 billion, much lower than the $467.2 billion registered in the previous financial year.

In March however, the latest upsurge was due to the continued rise in gold imports which rose by an incredible 584 percent, totaling $ 7.1 billion in March. Imports had risen to $5.2 billion in February.

Among other large imports, inbound shipments for electronics ($2.53 billion), and machinery ($1.3 billion) prominently figured in March.

India's trade deficit stood at $ 98 billion in 2020-21. 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. Economists say that the trade deficit will continue to widen.