Turning the tide after six months of contraction and in step with other economic indicators, exports grew 5.27 per cent in September.
Together with improvement in goods and services tax collection, the purchasing managers’ index (PMI), and auto sales, this shows signs of economic recovery after gross domestic product declined 24 per cent in the first quarter of 2020-21.
Boosted by high-value items such as electronic and engineering goods, outbound shipment stood at $27.40 billion in September against $26.02 billion in the same month a year ago, showed the preliminary trade data released by the commerce department on Friday.
Growth was higher than the 2.9 per cent rang up in February, which was the only other month in this calendar year to show increase in exports.
“Another indicator of the rapid recovery of the Indian economy as it surpasses pre-Covid levels across parameters,” Commerce and Industry Minister Piyush Goyal tweeted.
Exports in September were close to February’s $27.65 billion. Covid-induced lockdown started towards the end of March.
Goyal’s tweet further reads — exports take a leap in September, Atmanirbhar Bharat emerges stronger from Covid.
Imports declined 19.60 per cent at $30.31 billion in September against $37.69 billion in the same period 2019-20.
The pace of contraction is the lowest since March, when lockdown started. This leaves a trade deficit of $2.91 billion, the lowest in three months.
Non-oil, non-gold imports declined 13.29 per cent in September against nearly 30 per cent in the previous two months. This category indicates industrial demand.
However, the data showed the recovery might be nascent.
“The sharp gap in non-oil, non-gold imports remains cause for concern regarding the strength of domestic demand,” said Aditi Nayar, principal economist, ICRA.
Among high-value goods, exports of drugs and pharmaceuticals grew 24.36 per cent, engineering goods 3.73 per cent, and electronic goods 0.04 per cent.
However, gems and jewellery declined 24.66 per cent.
Imports of crude and petroleum contracted 35.92 per cent, machinery (electrical and non-electrical) 36.76 per cent, and transport equipment 47.08 per cent.
Exports during the first six months fell 21.43 per cent at $125.06 billion, while imports went down by 40.06 per cent at $148.69 billion.
Federation of Indian Export Organisations President Sharad Kumar Saraf attributed growth in September to the gradual lifting of lockdown and anti-Chinese sentiment the world over. He said exporters had started receiving a lot of enquiries and orders and export performance was likely to be better in the next few months.
Even though the government talked of recovery, exporters point to the challenges ahead. Engineering Export Promotion Council of India Chairman Mahesh Desai said: “While the reversal in trend for exports is a matter of relief, challenges would continue, given the global health emergency and its economic impact on major economies.”
Trade Promotion Council of India Chairman Mohit Singla said exports were recovering as the international market was opening up.
Saraf said the immediate need was to address key issues, including the release of benefits of the Merchandise Exports from India Scheme (MEIS), resolving risking exporters’ issues, an early introduction of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme in all sectors, and introducing the e-wallet scheme.