Key Highlights of the Report –
- The overall import and export trade growth remained flat during the July-September quarter of 2019
- While a subdued growth marked the imports into the country, the overall fiscal impact was neutralised by an identical contraction in exports
- Refrigerated cargo (reefer) exports from India to the Mediterranean region saw an increase, primarily fuelled by meat, fish, and shellfish
- A marked increase in the overall exports to Africa by 11% was witnessed, led by appliances & kitchenware, vehicles & seeds, cereals, and flour.
India’s import and export container trade in Q3 2019 (July-September) remained flat in comparison to the global growth of 1.5%. The slowdown has been linked with the weaker domestic demand, as well as a reflection of the broad-based cyclical weakening of the economic environment in all the main global economies.
The adverse consequences of escalating trade restrictions also weighed on trade growth in the quarter. The trade restrictions have reduced bilateral trade between the United States of America and China, and led to shifts in trade structures, with global importers having shifted sourcing from China to other countries such as Vietnam, Taiwan, Bangladesh and Korea, with Thailand, Mexico and India also showing early signs of being next in line to benefit.
Specifically in India, the economic uncertainty, tight liquidity, declining global export orders, and evolving domestic political scenario also affected the flow of investments and added to currency volatility. While imports into the country witnessed a subdued growth, the overall fiscal impact was nullified by an identical contraction in exports.
Boosting trade with China while safeguarding national interests:
China is among the top five import countries for India, however, imports have declined. India is looking for greater access to the Chinese market while trying to arrest the declining farm commodity exports. Private companies from India and China have signed more than 120 MoUs for the export of various products from India, including sugar, chemicals, fish, plastics, pharmaceuticals and fertilisers.
However, India has been cautious when it came to the Regional Comprehensive Economic Partnership RECP) unless a deal was offered which would help protect the interests of local businesses and avoid flooding goods from China into the Indian market through third countries.
“The current slowdown witnessed in the last two quarters can be accredited to tight liquidity and working capital, weaker domestic consumption patterns and slower global growth. As the global economy continues to face challenges, and trade tensions between major economies ensue, many leading global importers have begun exploring trade alternatives to China. The USA has emerged as a strong trade partner with India showing growth in exports as well as imports. India boosted its ‘Ease of Doing Business’ in World Bank’s 2020 rankings. This provides a huge opportunity to entice multinationals and global investors to grow their trade with India.”~Steve Felder, Managing Director, Maersk South Asia
In order to achieve the Government goals of reaching a USD 5 trillion economy, a focused approach to implement reforms and measures has to be in place in order to drastically improve the landside infrastructure to boost logistics further. This will, in turn, catalyse the export growth, supported by robust policy reform.
Mr Felder also stressed how in its second term, the Government has a strong focus on procuring FDI inflows, structuring policy reforms and facilitating infrastructure development. Furthermore, an impetus on increasing industrial manufacturing while easing corporate tax structures will further prove to be an advantage to the Indian economy.