Rising Trend: India’s May exports, imports up; deficit widens (Ld)

India’s merchandise exports in May rose to $32.27 billion, higher by 69.35 per cent over $19.05 billion recorded in May 2020, official data showed on Tuesday.

The exports last month recorded a 8.11 per cent growth over the May 2019 levels. The country’s merchandise exports in April 2021 had risen to $30.63 billion.

As per the data, the value of non-petroleum and non-gems and jewellery exports in May 2021 was $23.97 billion, as compared to $16.36 billion in May 2020, registering a positive growth of 46.50 per cent.

“As compared to May 2019, non-petroleum and non-gems and jewellery exports in May 2021 registered a positive growth of 11.51 per cent,” an official statement on foreign trade said.

Similarly, India’s merchandise imports in May 2021 were $38.55 billion, an increase of 73.64 per cent over $22.20 billion in May 2020.

However, imports declined by 17.42 per cent over May 2019.

“Oil imports in May 2021 were $9.45 billion which was 171.10 per cent higher in dollar terms compared to $3.49 billion in May 2020,” the statement said.

“As compared to May 2019, oil imports in May 2021 were 24.94 per cent lower in dollar terms and 21.18 per cent lower in rupee terms,” it added.

On the same page, non-oil imports in May 2021 were estimated at $29.10 billion which was 55.48 per cent higher in dollar terms compered to $18.71 billion in May 2020.

“Non-oil and non-gold imports were $28.42 billion in May 2021, recording a positive growth of 52.48 per cent, as compared to non-oil and non-gold imports of $18.64 billion in May 2020.”

Consequently, trade deficit in May 2021 widened to $6.28 billion, increasing by 99.61 per cent over the trade deficit of $3.15 billion in May 2020.

“India’s exports for the period April-May 2021 outperformed the level of exports witnessed during the corresponding period of not only 2020, but also that of 2019 (April-May),” said Prahalathan Iyer, Chief General Manager, Research and Analysis, India EXIM Bank.

“In fact, the April-May 2021 exports have grown 12.2 per cent over the export level of April-May 2019,” Iyer added.

According to Aditi Nayar, Chief Economist, ICRA: “The widening state level restrictions shrunk the imports of crude oil and gold, narrowing the merchandise trade deficit to an eight month low in May 2021

“After the huge inventory build up in February-April 2021, the impact of the lockdowns on retail demand led to a sharp slowdown in gold imports.”