India achieves $400-billion target for goods exports

Context – India surpassed its merchandise export target of $400 billion set for FY2022 with 10 days to spare – exports crossed $400.8 billion on March 21 and there’s a likelihood that total exports for the fiscal year may cross $410 billion by the end of the month.

Key Highlights and Stats

• Exports have registered a 37 per cent increase compared to $292 billion in the previous fiscal and 21 per cent over the previous record high of exports of $330 billion set in FY2019, prior to the pandemic.
• India’s imports during the period have also surged to a record high level of over $589 billion during the fiscal, taking India’s trade deficit to a record $188.2 billion.
• Preliminary analysis showed that while commodity price hike had contributed to the rise in exports, many goods including auto components, motor vehicles, cereal preparations, buffalo meat, rice, carpets, processed fruits and juice also saw increases in overall export volumes despite stagnant or declining commodity prices.
• Experts noted that another key factor driving the surge in exports is the pent-up global demand that was unmet during major waves of the Covid-19 pandemic.

Key Drivers of Export Growth

• Engineering goods were the largest contributors to the growth in exports, growing at nearly 50 per cent and expected to hit $110 billion by the end of FY2022.
• Electronics goods exports rose by 42.8 per cent in the first 11 months of the fiscal, while gems and jewellery exports grew by 57.3 percent boosted by a rise in gold prices.
• Export of petroleum products grew by 147.6 per cent, driven by a steady increase in crude oil prices.
• Other products which recorded strong growth in exports include organic and inorganic chemicals, readymade garments, meat and dairy products as well as marine products.

According to UNCTAD estimates based on national trade statistics, the positive trend for international trade in 2021 (calendar year) was largely the result of increases in commodity prices, subsiding pandemic restrictions and a strong recovery in demand due to economic stimulus packages.

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