The low base effect powered India’s merchandise exports to grow by over 195 per cent on a year-on-year basis last month.
In April 2021, exports grew to $30.63 billion, higher by 195.72 per cent over the $10.36 billion reported in April 2020.
“As compared to April 2019, exports in April 2021 exhibited a positive growth of 17.62 per cent in dollar terms and 26.17 per cent in rupee terms,” an official statement on foreign trade said.
“Non-petroleum and non-gems and jewellery exports in April 2021 were $23.62 billion, as compared to $9.08 billion in April 2020, registering a positive growth of 160.24 per cent,” it added.
As compared to April 2019, the non-petroleum and non-gems and jewellery exports in April 2021 registered a positive growth of 20.47 per cent.
Similarly, India’s merchandise imports grew in April 2021, rising to $45.72 billion, with an increase of 167.05 per cent over $17.12 billion in April 2020.
“Imports in April 2021 have registered a positive growth of 7.87 per cent in dollar terms and 15.71 per cent in rupee terms in comparison to April 2019,” the statement said.
“Oil imports in April 2021 were $10.87 billion, which was 133.24 per cent higher in dollar terms compared to $4.66 billion in April 2020. As compared to April 2019, oil imports in April 2021 were 5.98 per cent lower in dollar terms and 0.85 per cent higher in rupee terms,” it added.
Besides, the data also showed that non-oil imports in April 2021 were estimated at $34.85 billion which was 179.70 per cent higher in dollar terms compared to $12.46 billion in April 2020.
“As compared to April 2019, non-oil imports in April 2021 were 13.07 higher in dollar terms and 21.28 per cent higher in rupee terms,” the statement said.
“Non-oil and non-gold imports were $28.61 billion in April 2021, recording a positive growth of 129.68 per cent, as compared to non-oil and non-gold imports of $12.46 billion in April 2020. Non-oil and non-gold imports in April 2021 recorded a positive growth of 6.56 per cent over April 2019,” it added.
Consequently, the trade deficit in April 2021 rose to $15.10 billion over $6.76 billion in April 2020.
“The annualised growth print of both exports and imports were exceptionally high, benefitting from the low base effects which will likely continue until June 2021,” said Madhavi Arora, Lead Economist, Emkay Global Financial Services.
“Near-term domestic demand could be strained amid Covid II wave and lockdowns, but tailwinds like expected vaccine progress and global growth spillovers should help regain the economy’s traction,” she added.
According to ICRA’s Chief Economist Aditi Nayar: “Setting aside the massive growth over the lockdown base of April 2020, the robust growth in exports in April 2021 relative to April 2019 is heartening, even as its sustenance remains to be seen.
“The high merchandise imports in absolute terms in April 2021 reflect a combination of high commodity prices, resolute domestic demand and inventory building in light of the localised restrictions.”
Suman Chowdhury, Chief Analytical Officer, Acuite Ratings & Research, said: “Overall, the merchandise trade deficit at $15.1 billion shows a steady normalisation in external trade since December 2020. The performance of the external sector has been relatively better in April 2021 compared to the domestic demand given the slowdown in the nascent growth momentum aggravated by the highly intense Covid 2.0 wave.
“However, the sustainability of such a healthy trade trajectory will need to be seen with the stricter imposition of lockdown by several states in May 2021.”
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