Merchandise exports surged a record 196% year-on-year in April, driven mainly by a favourable base, as the country had witnessed a Covid-induced lockdown throughout April last year. However, what comes as a pleasant surprise is that even in absolute terms, exports in April stood at $30.6 billion, up almost 18% from the same month in 2019 (before the pandemic struck).
Addressing reporters on Friday, commerce secretary Anup Wadhawan said the current wave of the Covid-19 pandemic is unlikely to alter the export trajectory in the coming months and that the country’s external trade will continue to perform well. The secretary also said refund rates under the Remission of Duties and Taxes on Exported Products(RoDTEP) scheme, which replaced the Merchandise Export From India Scheme (MEIS) from January 1, 2021, could be notified soon. The RoDTEP scheme is yet to be operationalised.
Separately, at an event of industry chamber PHDCCI, director-general of foreign trade Amit Yadav said the RoDTEP rates will be announced in 15 days. According to the latest official data released on Friday, imports, too, grew 167% to $45.7 billion in April, indicating improvement in domestic demand. Interestingly, gold imports surged to as much as $6.2 billion in April from a mere $2.8 million a year earlier.
While the unusual growth in trade was aided by favourable base effects (exports were down by over 60% and imports by almost 59% in April 2020), it also signals the worst is over and the supply side is able to respond better to pick-up in demand from key markets. Of course, the base effect will continue to support trade growth in the coming months as well.
What also augurs well is that core export (excluding petroleum and gems and jewelry), the growth in which has mostly exceeded that in overall merchandise exports over the past two years, shot up by 160% from a year before and 20.5% from the April 2019 level. Such imports jumped 130% year-on-year and almost 7% from the April 2019 level.
Analysts have said sustenance of high exports (in absolute terms) in the coming months will signal a meaningful turnaround, as they cite the roller-coaster ride of exports in the wake of the pandemic last fiscal.
Thanks to enhanced imports, trade deficit rose to $15.1 billion in April from $13.9 billion in the previous month. The commodities or groups that have recorded high growth in April included gems & jewellery (9271%), leather & leather products (1201%), garments(927%), electronics (373%), engineering goods (238%) and petroleum products (192%).