India's exports contract 60% in April

Contracting for the second straight month, India’s exports shrank by a record 60.28% in April to $10.36 billion, mainly on account of the coronavirus lockdown, official data showed on Friday.

Imports too plunged by 58.65% to $17.12 billion in April, leaving a trade deficit of $6.76 billion as against $15.33 billion in April 2019, according to the data by the commerce and industry ministry.

This is the lowest trade deficit since May 2016, when it had stood at $6.27 billion.

The country’s exports had declined by 34.57% in March 2020.

“The decline in exports has been mainly due to the ongoing global slowdown, which got aggravated due to the current Covid-19 crisis. The latter resulted in large scale disruptions in supply chains and demand resulting in cancellation of orders,” the ministry said in a statement.

Barring iron ore and pharmaceuticals, all the remaining 28 key sectors registered negative growth in the month under review.

Gems and jewellery shipments declined 98.74%, followed by leather (- 93.28%), petroleum products (- 66.22%), engineering goods (- 64.76%), and chemicals (- 42%) .

Oil imports in April were $4.66 billion, which was 59.03% lower as compared to the same month last year.

All 30 key imports sectors like gold, silver, transport equipment, coal, fertiliser, machinery and machine tools posted negative growth during the month.

Non-oil imports fell 58.5% to $12.46 billion in April. Gold imports stood at $2.83 million, as against $4 billion in April 2019.

The nationwide lockdown to contain the spread of the coronavirus outbreak began on March 25, shutting industrial units and restricting movement of goods.

Commenting on the numbers, Federation of Indian Export Organisations (FIEO) said it is “highest-ever” decline in monthly exports, and demanded an incentive package from the government.

FIEO President Sharad Kumar Saraf said the lockdowns around the world have not only pushed business sentiment to the lowest levels but also impacted supply chains and economic growth.

“We may expect revival in exports from the third quarter of the fiscal, depending on the condition evolving in the international market.

“With major global players including the US, UK, Canada, Japan, Germany, France, Austria, Spain, and Bangladesh having provided bailout or financial packages to their industry to sail through these difficult times, it is also expected that the same would help in bringing good news for the overall international trade,” Saraf said.

He said with cancellation of 70-80% of orders, job losses and rising NPAs among exporting units, the government should immediately implement the economic measures announced at the ground level for quick revival.