India’s Merchandise Exports Jump 15 Per Cent In May To $37.3 Billion
India’s merchandise import in May 2022 remained uncomfortably higher at $60.62 billion and 56.14 per cent over $38.83 billion imports in May 2021.
Despite global headwinds India’s merchandise export surged 15.46 per cent to $37.3 billion in May 2022 as compared to $32.30 billion in May 2021, recording the highest ever overseas shipments so far this year, led by a strong show from exports of petroleum products, electronic goods and readymade garments (RMG) of all textiles.
India’s merchandise export in April-May of FY 2022-23 also saw a y-o-y jump of 22.3 per cent to $77 billion over $63 billion in April-May 2021-22, which is again the highest export for first two months of a year, preliminary data of the Commerce Ministry released on Thursday (2 June) showed.
The highest-ever exports of over $37 billion during May of a fiscal year demonstrates the ‘continuous resilience of the exports sector amidst rising global uncertainties’, says President of the Federation of Indian Export Organisations, A Sakthivel.
According to FIEO, the other top performers during the month were engineering goods, gems and jewellery, organic and inorganic chemicals, drugs and pharmaceuticals and rice. “Labour-intensive sectors also contributed to the exports basket, which itself is a good sign, further helping job creation in the country,” Sathivel said.
According to Nomura, while the third wave of the pandemic had some adverse impact on private consumption and contact intensive services, India’s strength in exports have contributed to offset this setback.
However, displaying a traditionally stubborn high streak, the country’s trade deficit in May 2022 jumped to $23.33 billion over $6.53 billion of deficit in the same year ago period as India’s merchandise import in May 2022 remained uncomfortably higher at $60.62 billion and 56.14 per cent over $38.83 billion imports in May 2021.
For the first two months of FY23 too, trade deficit was $43.73 billion as compared to $21.82 during April -May 2021-22 as merchandise imports in the April-May period of 2022-23 swung upwards to $120.81 billion which was an increase of 42.35 per cent over $84.87 billion in April-May of 2021-22.
A closer look at the movement of goods outside India shows non-petroleum exports in May 2022 grew 8.13 per cent y-o-y to $29.18 billion over non-petroleum exports of $26.99 billion in May 2021. The cumulative value of non-petroleum exports in April -May FY 2022-23 was 12.9 per cent more at $61.09 billion over the cumulative value of $54.11 billion in April-May FY 2021-22.
Another strong show was by Indian engineering exports which touched $9.29 billion in May 2022 as against $8.62 billion in the same month last year recording a growth of 7.84 per cent. Engineering Export Promotion Council India Chairman Mahesh Desai points out that in the first two months of the current fiscal, engineering exports were $18.97 billion, up 14.34 per cent over $16.59 billion in the same period of the previous year. “The sector is standing on firm footing and can withstand the challenges,” said Desai.
Meanwhile, the value of non-petroleum, non-gems and jewellery exports in May 2022 touched $26.08 billion, registering a growth of 8.57 per cent over exports of the same basket of goods worth $24.02 billion in May 2021. The cumulative value of non-petroleum, non-gems and jewellery exports in the first two months of the current fiscal increased 14.15 per cent to $54.52 billion over the cumulative value of non-petroleum, non-gems and jewellery exports of $47.76 billion in April-May 2021-22.
Desai highlights the recent reduction in excise duty on auto fuels, custom duty calibration on raw materials of steel and measures to boost local availability of the key input to calm down steel prices as encouraging measures by the government. The main twin concerns for exporters are demand slowdown in advanced economies over the short and medium term which could potentially dent the ongoing momentum and rise in imports.
As per Crisil, given the sharp rise in international commodity prices following the Russia-Ukraine war, India’s import bill went up at a faster rate than exports, resulting in a greater drag on the economy in fiscal 2022 than estimated earlier.
As an upside, the growth in imports of gold could lead to impressive gems and jewellery exports in the next 1-2 months with lead time, says Sakthivel who feels more is needed from the government like rationalising exports of raw materials to push value-added exports, augment container manufacturing and developing an Indian shipping line of global repute.
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