India's exports rise to all-time high of $95 billion in June quarter

India recorded the highest-ever exports of $95 billion during April-June, up 85 per cent year-on year (YoY) and 18 per cent higher than the first quarter of the fiscal year 2019-20.

“It is also 16 per cent more than the previous highest Q1 exports of FY19 ($82 billion) and is higher than the earlier peak of exports in Q4FY21 ($90 billion),” the commerce department said on Friday. 

The merchandise exports grew 47 per cent YoY to $32.46 billion in June, driven by a robust demand of engineering goods, petroleum products, and gems and jewellery in the external markets.

The government is working towards achieving another all-time high of $400 billion merchandise exports target by the end of the current fiscal year, Commerce and Industry Minister Piyush Goyal said in a briefing. The ministry will work with relevant stakeholders to achieve this target, he said.

“Highest-ever merchandise export in a quarter of $95 billion has been achieved in the April to June in 2021 despite the severity of the second wave of Covid-19. Sector-specific interventions, involvement of all the stakeholders and functioning of the government as a whole helped in achieving the growth,” he said. 

The minister hopes services exports in the next five years will touch $500 billion.

Commerce Secretary BVR Subramanian said the $400-billion target would be achieved by disaggregating the aim product and sector wise. Besides, the government will try to achieve a target of $500 billion in FY23 and $1 trillion merchandise exports annually by the next five years.

Subramanian said several labour-intensive sectors had seen rapid export growth. “The exports in the engineering goods sector rose by $5.2 billion over Q1FY20. Likewise, rice exports growth has remained positive since May 2020 and rose by 37 per cent in Q1FY22, compared to Q1 of 2019-20,” he said.

India’s merchandise imports in June was $41.86 billion, up 96.33 per cent YoY and 2.03 per cent as compared with June 2019. During the quarter ended June, imports more than doubled to $126.14 billion as compared to Apri-June 2020. However, it declined 3.05 per cent from $130.1 billion in April-June 2019.

As a result, India was a net importer in June, with a trade deficit of $9.4 billion, widened by 1,426.6 per cent over the trade surplus of $0.71 billion last year. India was a net exporter in June last year due to the disruption caused by the pandemic.

According to Aditi Nayar, chief economist at ICRA, non-oil non-gold imports jumped to $30.2 billion in June, from Rs $28.5 billion on average in the past two months, reflecting a pick-up in demand with the gradual unlocking as well as the high commodity prices.

“The sharp increase in non-oil exports is encouraging, reflecting both the vaccine-driven revival in activity in many trading partners, as well as the higher prices of commodity exports. The sustenance of non-oil exports at an elevated level will be critical for a downward revision in our projection of a current account deficit of $23-28 billion in FY22,” Nayar said.

Other announcements

Goyal said the government was working with the finance ministry’s revenue departments towards simplifying the Special Economic Zone (SEZ) rules. Besides, the government will shortly notify the rates and reveal how various sectors will be compensated for various taxes, as per the Remission of Duties and Taxes on Export Products (RoDTEP) scheme. 

This is not a subsidy to any exporter and only a refund of taxes, the minister said.