India’s FY21 merchandise exports down 7.26% at 290.63 billion

Excluding gems and jewelry and PoL exports, both involving very moderate value addition, the growth in merchandise exports in 2020-21 was actually (+) 1 per cent, ie, an increase of over 2019-20, notwithstanding the Covid disruption. 

This, according to the commerce ministry is a reflection of the immense adaptability in our exporters in capturing new opportunities in sectors like other cereals, oil meals, rice, cereal preparations snd miscellaneous processed items, drugs and pharmaceuticals, spices, fruits and vegetables, carpets, jute manufactures, ceramic products and glassware and organic and inorganic chemicals, while containing the downturn in other sectors in the face of huge challenges. The decline in export values in petroleum products and G&J also, predominantly reflected decline in global prices rather than volumes.   

Petroleum products exports declined by $15.4 billion y-o-y during FY 2020-21.This is a significant fraction of the decline in India’s total merchandise exports in FY 2020-21 of $22.7 billion. Export of petroleum products showed a decline of (-) 37.3 per cent YoY during FY 2020-21. The share of petroleum products in overall exports also declined to 8.9 per cent during FY 2020-21 compared to 13.2 per cent in FY 2019-20. Petroleum demand had been badly hit due to Covid-19 related lockdowns across the globe. Hence, the drop in exports was unavoidable during this period. 

Decrease in exports of diamond and other jewellery further dragged down overall exports and showed a decline of 49.9 Billion YoY during FY 2020-21, again a significant component in the overall fall of $22.7 billion. Diamond and other jewellery registered a drop of 27.5 per cent YoY during FY 2020-21. Share of Gems &Jewellery in overall exports also declined to 9.0 per cent during FY 2020-21  compared to 11.5 per cent in FY 2019-20. 

Further, Indian industry imports rough or unpolished diamonds from other countries for finishing/polishing/cutting etc. Therefore, the import content is very high in exports of diamonds and other jewellery resulting in low value addition

The commodities/commodity groups which recorded positive growth during 2020-21 are other cereals (219.13 per cent), oil meals (87.91 per cent), iron ore (86.78 per cent), rice (37.06 per cent), cereal preparations and miscellaneous processed items (21.16 per cent), drugs and pharmaceuticals (18.07 per cent), spices (10.37 per cent), fruits and vegetables (8.63 per cent), carpet (8.39 per cent), jute manufactures, including floor covering (8.29 per cent), ceramic products and glassware (6.02 per cent) and organic and inorganic chemicals (0.51 per cent).

The merchandise trade deficit between 2019-20 and 2020-21 declined from $161.35 billion to $98.56 billion

The overall trade deficit, taking merchandise and services together, for April-March 2020-21 is estimated at $12.74 billion as compared to the deficit of $77.76 billion in April-March 2019-20. 

India’s merchandise exports in March 2021 grew by 60.29 per cent compared to levels in March 2020, driven by healthy export growth in key sectors such as engineering goods (71.30 per cent), gems and jewellery (78.93 per cent), petroleum products (35.52 per cent), drugs and pharmaceuticals (48.49 per cent) and organic and inorganic chemicals (46.50 per cent). 

Merchandise exports-other than POL and gems and jewellery put up an even more impressive performance in March 2021 attaining a value of $27.42 billion, against $16.95 billion in March 2020, an increase of 61.75 per cent.

Commerce secretary Wadhawan said the prospects for a quick recovery in world trade have improved as merchandise trade expanded more rapidly than expected in the second half of last year. World merchandise trade volume is expected to increase by 8 per cent in 2021 (Jan-Dec) after falling 5.3 per cent in 2020 (Jan-Dec), as per the WTO. World trade continues its rebound from the pandemic-induced collapse that bottomed out in the second quarter of last year.

The Covid period has revealed new opportunities for Indian food sector. There is a rise in demand in US, Europe, Australia, New Zealand, Israel, Palestine and Egypt. Exporters have received enquires for fresh/ dehydrated garlic, spices (chilli, turmeric, ginger), seed spices (cumin, fennel), sesame seeds/oil, sugar (new demand from Sri Lanka) and groundnut. The demand for non-basmati rice from new buyers such as Malaysia and the Philippines is likely to boost exports in the coming months, he added.

India’s dominance in the pharma sector has been reinforced with supply of critical covid related supplies to over 150 countries and rapid growth in exports during the Covid period.

This sets an excellent foundation for our export sector to take off on the back of significant improvement in EoDB, creation of a plug and play investment / manufacturing environment across various industrial corridors, and launch of the very substantive PLI schemes across 13 sectors, says the commerce ministry.