As the pandemic escalates, the economic disposition of the country is experiencing tremors with the country's trade deficit for goods widening to $15.24 billion in April, preliminary data released by the government projected.
The merchandise export for the month surged up to $30.21 billion as compared to last year which stood at $10.17 billion due to the low-base effect associated with the pandemic which incited the nationwide lockdown and temporarily curbed the economic flow of activities.
Notably, the exports rose to 16.03 percent from $26.04 billion in April 2019, signifying the low base was somewhat sustained by strong demand in the first month of the current fiscal. An increase in the outbound shipments in the month of April was propelled by the demand for petroleum, engineering, gems, and jewelley products.
The latest data also indicate that even the second wave which has devastated the nation with soaring COVID cases and localized lockdowns didn't affect the demand for the goods.
On a sequential basis, the exports dropped by 12.3 percent from $34.45 billion in March, as reported by Business Standard.
The preliminary data issued by the Ministry of Commerce and Industry reflected that the country's merchandise imports increased to $45.45 billion up 165.99 percent year-on-year.
The inbound shipments rose 7.22 percent from $42.39 billion in April 2019. This has led to a trade deficit of $15.24 billion, up 120.34 percent year-on-year. Surprisingly, the deficit was $16.30 billion in April 2019.
As per the data, the surge in inbound shipments can be credited to the higher import of gold, petroleum products, and electronic goods.
"The impressive growth reiterates our assessment that the order booking position of our exporters is extremely good and with gradual improvement of the situation in the country, will push exports growth further," said Sharad Kumar Saraf, President, Federation of Indian Export Organisations (FIEO).
He stated that a growth of 15 percent on the base of April 2019 is a good indicator and reflects a positive digit trend. However, the rising imports and a widening trade deficit is also a matter of concern and should be looked into, Saraf added.
"The recent surge in COVID-19 cases has posed risks to the growth but we remain hopeful of continued recovery during the year. The WTO has also revised its projection upward and expects the global trade volume to increase by 8% in 2021," said Engineering and Export Promotion Council of India (EEPC) Chairman Mahesh Desai.
Desai further observed that the localized lockdowns and night curfews regulated by several states to limit the second wave can seemingly result in a shortage of workers and logistical issues. However, this could be a short-term problem, he affirmed.