Exports of goods fell marginally by 0.8 per cent to $26.89 billion (year-on-year) in December even as pharmaceuticals, chemicals and electronic products showed robust increases and the overall order position improved with consumers opening up their purse strings wider during Christmas and New Year.
Trade deficit during the month widened 25.78 per cent to $15.71 billion with imports increasing 7.6 per cent to $42.6 billion due to a sharp increase in gold imports.
In December, the value of non-petroleum exports was $24.73 billion, a growth of 5.33 per cent over December 2019. Exports also improved compared to November, when outbound shipments declined 8.74 per cent to $23.52 billion.
Exporters are hopeful of better times in the months ahead. “December exports also signal that our traditional and labour-intensive sectors have passed the most challenging and testing times as both Christmas and New Year season sales have shown positive trends with further improvement in the coming months.
“Going by this trend, we expect our inventories to be liquidated, adding further to overall demand,” said SK Saraf, President, FIEO.
The preliminary trade data for December was released by the Commerce and Industry Ministry on Saturday.
Exports during April-December 2020-21 fell 15.8 per cent to $200.55 billion compared with the same period last fiscal. Imports declined 29.08 per cent to $258.29 billion.
Items of exports
Major commodities whose exports increased during December include other cereals, oil meals, iron ore, jute items, handicrafts, carpets, ceramic products and glassware, pharmaceuticals, spices, electronics, chemicals, fruits and vegetables, cotton yarn/fabrics/made-ups, handloom products, rice, meat, gems and jewellery and coal & minerals.
Engineering goods, a major export item, posted a marginal growth of 0.12 per cent during the month.
Amongst imports, gold recorded the sharpest increase of 81.8 per cent in December to $2.01 billion.
Other imports that increased include electronic goods, vegetable oil, chemicals, textile yarn and fabric, machine tools, pharmaceuticals and precious & semi-precious stones.
Despite the improvement in prospects, a point of concern for exporters was the reduction in exports of major products including petroleum products, oil seeds, leather and leather manufactures, coffee, RMG of all textiles, man-made yarn/fabrics/made-ups, marine products, cashew, plastic and linoleum and tobacco. Many of these items are also labour-intensive.
“While domestic economy is showing sure signs of a bounce back, there is still a rough sail for exports in the global market.
“This is despite the roll out of Covid-19 vaccine in several parts of the world,” said Engineering Export Promotion Council India Chairman Mahesh Desai.