The Indian economy is slowly beginning to stutter back to life as the countrywide lockdown to control COVID-19 is gradually lifted. Although case numbers continue to rise, resuming economic activity has brought cheer to many sectors, and in particular, exports. Commerce & Industry Minister Piyush Goyal said that preliminary data indicated the country’s exports were improving “drastically”, contracting only 36% in May as compared to 60% in April. There are also signs that in June, exports have already shown signs of gradual improvement, driven by a rise in orders as many buyers seek alternatives to China. There continues to be a fair degree of uncertainty, with many exporters predicting a return to positive growth only at the end of Q2 of FY2021, and certain sectors like agriculture still feeling the brunt of a massive drop in trade. However, all industry stakeholders are more focused on finding silver linings to the current economic gloom. Now all that remains is a phased recovery while ensuring that social distancing and lockdown measures are followed as much as possible to prevent a second wave of COVID-19 from wreaking havoc in the country.
Trade Update
14TH JUNE
# 73
The country’s exports are “drastically” improving with the outbound shipments contracting 36% in May as compared to 60% in April, Commerce and Industry Minister Piyush Goyal said on 11th June. “I am happy to share with you that in May, things have drastically improved and from the position of 60% down in April, the May data shows that our overall exports have been down 36%,” he said in a webinar.
After steep double-digit declines for three months, India’s exports are estimated to have dropped by just 0.8% during the first week of June due to a spike in the value of shipments to several Asian countries, led by China, amid indications of a pick-up in economic activity. Although the initial signs of improvement may be on account of bunching of shipments, there are other indicators, such as a jump in the number of e-way bills for goods transported within the country, which points to more manufacturing and services activity as the economy recovers from the lockdown.
Exporters are upbeat about the pick-up in shipments by the third quarter of the current fiscal with increased interest for Indian products from several countries. “In the past few days there has been increased inquiry about products from the country and many are looking at alternative supply chains in place of Chinese products and the country seems to be emerging as a favorite destination,” Ajay Sahai, CEO of the Federation of Indian Export Organisations, said.
Overseas shipment of goods from India’s factories are likely to be in negative territory till October, exporters told CNBC-TV18, even as they are getting inquiries from potential foreign buyers. Exports from the country crashed 60% in April to $10.36 billion, the lowest in almost three decades. “Going by the feedback of our members, we expect contraction in exports to continue till at least October,” said Ajay Sahai, CEO of the Federation of Indian Export Organisations, an umbrella body of exporters supported by the Ministry of Commerce.
Buffalo meat exports have suffered a loss of Rs. 5,300 crore since the lockdown began in March, an industry association said on 5th June. “Opening of the exporting units will help the sector,” said Fauzan Alavi, spokesperson for the All India Meat & Livestock Exporters Association. While export units in north India have started reopening, the trade has requested Maharashtra and Telangana governments to allow them to reopen offices and factories.
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