Trade Amidst Second Wave

India has been battered with a second wave of the coronavirus. The imposing of heavy restrictions like night curfews and shutting down of shops appears to have caused a scare among the business community across the nation who are now fearing grave economic losses. However, on the bright side, the country’s exports have surged by 60% to US $34.45 billion in March, whereas the trade deficit during March 2021 widened to US$ 14 billion. Experts said the jump could be attributed to a year-end phenomenon wherein exporters are merely trying to meet their annual targets.

Besides this, after a gap of eight years, India and the European Union (EU) are all set to meet at the negotiation table on May 8. India hopes that this trade talk will enable her to recover from the on-going crisis. Furthermore, union minister Nitin Gadkari at a recent event envisaged new opportunities for the MSME sector due to the restructuring of the global supply chain and countries looking to diversify their supply out of China.

Exports jump 60% in March to $34.5 bn; trade deficit widens to $14 bn

India’s merchandise exports surged to $34.45 billion, up 60 per cent year-on-year (YoY) in March, on the back of a low base effect in the lockdown-hit corresponding month last year.

Tracking the economic impact of the second wave

How strict are the lockdowns? The Oxford Stringency Index for India has risen to 69.9 as of April 13 from a recent low of 57.9 at the start of the month, reflecting the pan-India spread of the lockdown (see graphics). This is less stringent than at the height of the lockdown last April (100) and is similar to the state of the lockdowns in December.

The post-pandemic economy needs a new fiscal policy framework

India’s second wave of the covid pandemic is advancing at a frightening pace. On the economic policy front, a sharp contraction has upended the Fiscal Responsibility and Budget Management (FRBM) Act. As Arvind Subramanian and Josh Felman have suggested, after the ongoing crisis, our dysfunctional FRBM framework should be completely reformed (‘A Post-Covid Fiscal Framework’, Indian Express, 7 April 2021).

Nitin Gadkari: Opportunity for Indian MSMEs as countries look to diversify their supplies out of China

MSME Minister Nitin Gadkari on Thursday underscored the opportunity MSMEs in India have to plug themselves into the global supply chains as countries look to diversify their supply out of China. “With global supply chain undergoing significant restructuring and countries looking to diversify their supply out of china, our MSMEs have a great opportunity of being integrated into these global supply chains,” Gadkari said.

India, EU to resume formal FTA talks in May

After a gap of about eight years, India and the EU will resume formal negotiations for a trade and investment agreement on May 8, with both sides aiming to expedite a deal to aid economic growth in the post-pandemic era.