India's exports slip 0.8% in December 2020; trade deficit widens to $15.71 billion

Exports in December 2019 was $27.11 billion

India’s trade deficit widened to $15.71 bn in December, the highest since July, as imports rose and exports declined.

The country had experienced a trade surplus in June this year.

Exports slipped marginally by 0.8% and stood at $26.89 bn in December as compared to $27.11 bn in the same month in 2019, official data showed.

In November, exports had declined 8.74%.

After a gap of nine months, imports in December recorded a positive growth of 7.6% at $42.6 billion. “India is thus a net importer in December 2020, with a trade deficit of $15.71 billion, as compared to a trade deficit of $12.49 billion, widened by 25.78%,” the finance ministry said.

India’s premier export body has forecast $290 billion exports by the end of this fiscal as outbound shipments have been hit hard by the Covid-19 pandemic during the first half of the year.

In April-December 2020-21, the country's merchandise exports contracted by 15.8 per cent to USD 200.55 billion, as compared to USD 238.27 billion in the same period last fiscal.

Imports during the nine months of the current fiscal declined by 29.08 per cent to USD 258.29 billion. It was USD 364.18 billion in April-December 2019-20.

In December 2020, oil imports declined by 10.37 per cent to USD 9.61 billion. During April-December, the imports dipped by 44.46 per cent to USD 53.71 billion, the ministry said.

Major commodities which have recorded positive growth in exports during the month under review include oil meals (192.60 per cent), iron ore (69.26 per cent), carpet (21.12 per cent), pharmaceuticals (17.44 per cent), spices (17.06 per cent), electronic goods (16.44 per cent), fruits and vegetables (12.82 per cent), and chemicals (10.73 per cent).

The other commodities in the positive terrain include cotton yarn/fabrics/ made-ups, handloom products (10.09 per cent), rice (8.60 per cent), meat, dairy and poultry products (6.79 per cent), gems and jewellery (6.75 per cent), tea (4.47 per cent), and engineering goods (0.12 per cent).

Sectors that registered negative growth include petroleum products (-40.47 per cent), oil Seeds (-31.80 per cent), leather and leather manufactures (-17.74 per cent), coffee (-16.39 per cent), ready-made garments of all textiles (-15.07 per cent), man-made yarn/fabrics/made-ups (-14.61 per cent), marine products (-14.27 per cent), cashew (-12.04 per cent), plastic and linoleum (-7.43 per cent), and tobacco (-4.95 per cent).

The major commodities imported with positive growth in December 2020 include pulses (245.15 per cent), gold (81.82 per cent), vegetable oil (43.50 per cent), chemicals (23.30 per cent), electronic goods (20.90 per cent), machine tools (13.46 per cent), pearls, precious and semi-precious stones (7.81 per cent), and fertilisers (1.42 per cent).

Sectors which recorded negative growth in December 2020 were silver, newsprint, transport equipment, cotton raw and waste, coal, coke and briquettes.

Commenting on the data, Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said that the marginal decline of just 0.8 per cent is showing signs of revival as order booking positions have continuously improved.

"Going ahead by this trend, we expect our inventories to be liquidated, adding further to the overall demand," he added.

Saraf urged the government to address some of the key issues, including adequate availability of containers, softening of freight charges, the release of the required MEIS (merchandise export from India scheme) benefits and clarity on SEIS (services exports from India scheme) benefits, and resolving risky exporters issues.

With PTI inputs