December Merchandise Exports Hits Record $37.81 bn, Up $7.74 bn over Nov

· Imports Jump to $59.48 bn

· $400 bn Annual Target in Sight says FIEO

· Electronics Emerges 2^nd Largest Group in Import Basket

Outbound shipments up 29% sequentially; Cumulatively, exports in April-Dec crossed $301 bn, achieving three fourth of annual target of $400 bn in first nine months of FY22

Merchandise exports witnessed nearly 40 per cent growth year-on-year to $37.81 billion in December, as demand for Indian products continues to remain robust, according to data released by the commerce and industry ministry on Friday.

On a sequential basis, outbound shipments grew nearly 29 per cent.

Engineering goods, petroleum products, gems and jewellery, organic and inorganic chemicals, drugs and pharmaceuticals, continued to remain top exported goods.

On a cumulative basis, India’s merchandise exports in April-December crossed $301 billion, achieving three fourth of the annual export target of $400 billion in the first nine months of FY22. The number has also exceeded total exports of 2020-21, which was at $290 billion.

A Sakthivel, president, Federation of Indian Export Organisations said that looking at the current trend, India is on course to achieving the $400 billion merchandise exports target for the current fiscal.

“Spectacular export growth coupled with orders in hand will help push India’s exports further during the next fiscal thereby aiming for exports in the vicinity of $525-530 billion during FY 2022-23. However, imports clocking $59.48 billion during the month with a very high growth of 38.55 per cent, is a point of concern and should be analysed,” Sakthivel said.

India’s merchandise imports also spurted, with shipments worth $59.48 billion coming in. This was 38.5 per cent beyond the year-ago period. As a result, India was a net importer, with a trade deficit of $21.68 billion, compared to a deficit of $12.62 billion last year.

Aditi Nayar, Chief Economist at Icra, said that while the merchandise trade deficit in December pulled back from the levels seen in September and November, benefitting from high exports ahead of the Christmas season, non-oil non-gold imports climbed very sharply.

“The surge in non-oil non-precious imports in December 2021 was led by electronic goods, fertilisers, chemicals and coal, all of which reported a YoY increase of more than US$1 billion,” Nayar said.

According to her, the impact of the third wave may squeeze wedding demand for gold, which is expected to help the trade deficit to scale back somewhat from the average of $21.7 billion seen since September 2021.

Non-petroleum and non-gems and jewellery exports, also known as core exports grew nearly 30 per cent on year to $28.92 billion. In case of such imports, the growth was 34 per cent on year at $35.47 billion in December.