Exports Rise for First Time in Six Months, up 5.27% in September

But it’s too early to rejoice, warn exporters; imports continue to dip

After six months of continuous fall, India’s goods exports posted a 5.27 per cent growth in September 2020 (year-on-year) to $27.4 billion, with crucial sectors such as readymade garments, engineering goods, petroleum products, pharmaceuticals and carpets on an upswing.

Some exporters, however, feel it may be too early to celebrate, as the global economic outlook continues to be grim, while others say that the increase in buyer enquiries must translate into business with adequate support from the government.

Other sectors which posted an increase in exports in September 2020 compared with September 2019 include iron ore, rice, other cereals, ceramic products and glassware, oilseeds, meat, dairy & poultry, handloom, tobacco and spices, as per the data.

“Make in India, Make for the World: Indian merchandise exports grew 5.27 per cent in September 2020 as compared to last year. Another indicator of the rapid recovery of Indian economy as it surpasses pre-Covid levels across parameters,” Commerce & Industry Minister Piyush Goyal had tweeted late on Thursday, disclosing the export figures.

Gold, silver imports down

Major commodities which posted a decline in imports in September 2020 over September 2019 are gold, silver, transport equipment, newsprint, leather and leather products and sulphur & unroasted iron parts.

Exports during April-September 2020-21 were at $125.06 billion, posting a fall of 21.43 per cent over the same period last year. Imports during April-September 2020-21 were at $148.69 billioncompared to $248.08 billion during the same period last year, a fall of 40.06 per cent.

Exports from India have been falling (year-on-year) since March 2020 when the government announced a national lockdown to check the spread of Covid in the country.

In March 2020, India’s goods exports fell 34.57 per cent compared to the same month last year, while in April, the fall was much steeper at 60.28 per cent.

In subsequent months, the severity of the decline in exports reduced as the world tried to get back to work; August 2020 witnessed a lower decline of 12.66 per cent to $22.7 billion.

FIEO President is Hopeful

Reacting to September 2020 export figures, FIEO President, Mr Sharad Kumar Saraf said that the monthly exports have grown by 5.27 to USD 27.40 billion first time during the financial year 2020-21 showing signs of revival as gradual lifting of lockdown have further improved the business sentiments. Anti-China sentiments across the globe has also been one of the reasons for the improved performance in exports. Besides, the exporters must be complimented for their excellent performance in spite of these challenging times. Mr Saraf reiterated that the arrest in decline of exports started during July with a lower negative double digit decline of 10.21 percent from a very high negative double digit decline of 60.28 percent during April, 2020 caused mainly due to lockdown measures followed across the globe because of Covid-19 pandemic.

As business activities and economic sentiments are inching towards normalcy globally, Mr Sharad Kumar Saraf added that exporters have started receiving a lot of enquiries and orders from across the globe helping many sectors to further show improved export performance, which is likely to get better and better in next few months. FIEO Chief, further added that integration in the global supply chain has also started showing signs of resilience further helping to give a boost to the Indian economy.

Reduction in imports during September 2020 by 19.60 percent to USD 30.31 billion compared to the same period during the previous fiscal led to a trade deficit of just USD 2.91 billion with a substantial decline of 75.06 percent during the month. Reduction in import of precious metals including Gold and Silver along with leather & leather products used as raw material for gems & jewellery and leather & leather product exports has also seen a negative growth during the month which does not augur well for these major labour-intensive sectors of exports.

With the WTO trade estimates for the second quarter putting the contraction only at 13 percent and the country’s exports showing signs of revival, Mr Sharad Kumar Saraf is of the view that going with this trend, India’s exports is likely to be in the range of USD 290-300 billion during the current fiscal. Which itself would be an impressive performance from the overall exporting community and for the sector as a whole who are facing such tough global conditions.

FIEO Chief reiterated that the urgent and immediate need of the hour is to address some of the key issues including the release of the MEIS benefits, resolving risky exporters issues, early introduction of RoDTEP across all sectors, capping of Rs 2 crore MEIS per IEC, introduction of NIRVIK Scheme and expediting introduction of the E-Wallet Scheme, which will further help in reviving the exports during these difficult and torrid times.