Key drivers of India’s export growth during FY 2021-22

This is the first time India has achieved its ambitious target of crossing the US$400 billion mark in merchandise exports. Driving the surge in exports is pent up unmet demand during major waves of the COVID-19 pandemic as well as the expansionary monetary policy adopted by developed countries to deal with the impact of the pandemic.

Major beneficiaries of India’s export growth include petroleum products (152.1 percent); cotton yarn, fabrics, made-ups, handloom products, etc. (55.1 percent); man-made yarn, fabrics, made-ups, etc. (46.9 percent); engineering goods (45.5 percent); jute products (36.2 percent); leather and leather products (32.2 percent); readymade garments of all textiles (29.9 percent); and handicrafts, excluding hand-made carpets (22 percent). Other commodities that witnessed an increase in export demand include organic and inorganic chemicals, marine products, mica, coal, and other ores and minerals, including processed minerals.

Exports surged year-on-year (YoY) to the United States by 46.4 percent, the United Arab Emirates (66.9 percent), Bangladesh (64.5 percent), Netherlands (90.5 percent), Singapore (26.8 percent), Hong Kong (7.8 percent), United Kingdom (28 percent), Belgium (90.4 percent), and Germany (21.1 percent) during FY 2021-22.

Factors driving increase in Indian imports during FY 2021-22

India’s import of merchandise goods has surged even higher than its export target, resulting in a high trade deficit at 87.5 percent. Major factors contributing to this soaring import bill include sharp growth in imports of crude oil, coal, gold, electronics, and chemicals as the economy reopened and business and consumption activity stabilized. Rising prices of commodities, including crude oil and coal, have played a significant role in adding to India’s import valuation.

China remained the top source for Indian imports during FY 2021-22, followed by the UAE, USA, Saudi Arabia, Iraq, and Switzerland. Other important countries contributing to India’s import basket during FY 2021-22 were Hong Kong, Singapore, South Korea, and Germany.

Source : india-briefing.com / For more details