Merchandise exports grew by 48% yoy in July’21

Merchandise exports of India increased by 48% year over year (yoy) in July, and by 34% in comparison to July 2019, showing exports surpassing pre COVID-19 level for five straight months. The growth is the result of a robust demand from international markets and an increase in global commodity prices.

Meanwhile, imports witnessed a growth of 59% yoy in July and 15% in comparison to July 2019. Apart from low base effect, the trade recovery has also been aided by the growth in exports beyond the pre-COVID-19 level for five consecutive months now. Exports in July 2021 were US$ 35.2 billion while imports during July 2021 were US$ 46.4 billion, resulting in trade deficit of US$ 11.2 billion.

According to the data, export growth in July 2021 for petroleum products was 216% yoy, gem and jewellery 130% yoy and engineering goods 42% yoy. Imports of pearls, precious and semi-precious stones increased by 179% yoy, gold 136% yoy and petroleum 97% yoy.

Aditi Nayar, Chief Economist at ICRA, commented, “With a robust services trade surplus in June 2021, in addition to the state lockdown-compressed merchandise trade deficit, we expect a small current account surplus of $2-3 billion for the first quarter. Overall, we expect the current account deficit to be limited to $20-25 billion or 0.7% of GDP in FY22.”