India’s exports touch record $34 bn in March; trade deficit at $14.1 bn

India’s merchandise exports and imports surged more than 50% each from a year earlier in March following a low base, leading to a trade deficit of $14.1 billion.

Preliminary data released by the commerce ministry on Thursday showed that merchandise exports grew 58% to a record $34 billion and imports rose 53% to $48.12 billion in a month when global trade faced significant challenges due to the blockage of the Suez channel by the Ever Given vessel for a week.

Indian exporters and importers use the Suez channel for trade worth $200 billion annually with North America, South America and Europe.

The high growth came over a low base of March 2020 when exports collapsed 35% and imports plummeted 29% as many countries worldwide, including India, went for lockdowns to stem the spread of covid-19. However, in terms of value, both exports and imports improved significantly from February. Exports and imports stood at $28 billion and $41 billion respectively in February.

“This is the highest-ever exports in Indian history, both in terms of value and growth,” a commerce ministry official said under condition of anonymity.

During March, non-petroleum exports rose 62% while non-petroleum and non-jewellery exports grew 61%. Exports were led by engineering goods (70%), gems and jewellery (76%) and drugs and pharmaceuticals (47%) while imports were led by a spurt in domestic demand for gold (584%) followed by electronic goods (77%) and machinery (60%).

Overall, exports in FY21 contracted by 7.4% to $290 billion while imports fell 18.1% to $389 billion during the year, leading to a trade deficit of $99 billion.

The World Trade Organization (WTO) on Wednesday said prospects for a quick recovery in global trade have improved as merchandise trade expanded more rapidly than expected in the second half of FY21.

According to new estimates from the WTO, the volume of global merchandise trade is expected to increase by 8% in 2021 after having fallen 5.3% in 2020, continuing its rebound from the pandemic-induced collapse that bottomed out in the second quarter of last year.

“Covid-19 continues to pose the greatest threat to the outlook for trade, as new waves of infection could easily undermine any hoped-for recovery,” WTO said.