Exports drop into negative in February, indicating a bumpy recovery


Having continued its rocky journey after the outbreak of the pandemic, the merchandise export in India have slipped again in February after growing at the fastest pace in 22 months in January.

While an obvious growth is expected in the months to come, it is believed to be driven more by an ultra-favourable base effect than any meaningful recovery.

The nations export after the outbreak of the pandemic crashed for the very first time between March and May 2020, as the government was compelled to impose a stringent lockdown to contain the pandemic.

However, as the lockdown curbs begin to ease a minor improvement was seen. Between June 2020 and February 2021, monthly outward shipments have risen only three times from a year before.

As per the preliminary data released on Tuesday, the exports in the month of February dropped 0.3 per cent year-on-year to $27.67 billion, against a 6.2 per cent rise in the previous month, indicating a bumpy recovery.

Where on one hand the exports make traders worrisome, the import figures in February have given a sigh a relief. Imports in February rose 7 per cent on-year to $40.55 billion against 2 per cent in the previous months, suggesting a gradual return of domestic demand that was battered by the pandemic.

For the same month, the trade deficit narrowed to $12.88 billion from $14.54 billion in the previous month, but it’s almost 27 per cent higher from a year earlier.

The data informs that the growth in core exports (excluding petroleum and gems and jewellery), which reflect the competitiveness of the economy slowed to 5.8 per cent in February from 13.4 per cent in January.

For the same commodities the imports eased only a tad to 7.4 per cent in February from 7.5 per cent in the previous month.

The data show that the overall outbound shipments until January this fiscal remained 12.3 per cent lower than a year earlier, while imports dropped at almost double the pace of 23.1 per cent.

Showcasing an impressive growth in exports in February were commodities like iron ore (168 per cent), rice (30 per cent) and drugs and pharmaceuticals (15 per cent).

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