Merchandise exports surged as much as 58.2% year-on-year in March to $34 billion, a record for any month, according to a preliminary estimate of the commerce ministry. Imports grew about 53% to $48.1 billion in March, with gold imports having surged by as much as 584%.
While the unusual growth in trade was aided by favourable base effects (exports were down by 35% and imports by almost 29% in March 2020 in the wake of the Covid-19 pandemic and a lockdown from March 25), it also signals the worst is over and the supply side is able to respond better to a pick-up in demand from key markets. Of course, base effect will continue to support trade growth in the coming months as well.
However, what comes as a relief for policy-makers is that even in absolute term, exports in March stood at a record of $34 billion, against close to $33 billion in the same month in 2019 (before the pandemic struck). Imports value, too, was impressive–$48.1 billion.
What is also encouraging is that core export (excluding petroleum and gems and jewellery) shot up by almost 61% while such imports grew over 44%.
Sustenance of high exports (in absolute terms) in the coming months will signal a meaningful turn-around, some analysts said, citing the roller-coaster ride of exports in the wake of the pandemic.
Thanks to enhanced imports, trade deficit rose to $14.1 billion in March from $12.6 billion in the previous month.
Exports of gems and jewellery rose surged by about 75% in March to $1.5 billion, while those of engineering goods rose by over 70% to $3.8 billion. Gold imports, which were hit by the pandemic and a spurt in prices earlier last fiscal, surged by 584% to almost $7.2 billion. Electronics goods imports jumped by 77% to $2.5 billion and machinery imports jumped by 60% to $1.6 billion.