Key highlights of the report –
- Overall imports grew at a mere 2% while exports remained flat
- Saudi Arabia emerged as one of the strongest export partners to India, while imports from Northern Europe grew
- India’s exports to North America strengthened; vehicles growth slowed
Maersk India in its Trade Report Q2 2019 has reported decline in India’s containerized trade growth to 1% (9% in the same period last year), due to a cocktail of international factors such as slowing trade growth, and growing trade tensions – coupled with domestic factors like rural consumer distress, tightening liquidity and a slow-down in key manufacturing sectors.
Combined, these triggers impacted the country’s economic activity, slowing overall import-export growth.
According to the report, West India delivered the highest growth with imports growing at 4% and exports at 11%. India’s exports to China declined by 20%, led by a reduction in demand for India-made textiles & apparel, while Imports from China contracted more, by 22%.
On the other hand, the increasing economic cooperation between India and Saudi Arabia emerged as one of India’s strongest export partners in Q2 2019, growing by 74%. The vegetables and tiles, stone & glass exports from India led to this growth.
Steve Felder, Managing Director, Maersk South Asia said, “The overall deceleration of trade growth reflects a broad-based slowdown across key economic sectors. Amidst increasing global volatility, a slower local economy and the USA’s withdrawal of preferential access for certain Indian products, India’s import-export trade is expected to continue to face headwinds in the coming months.”
India’s exports to North America strengthened; vehicles growth slowed
According to the report, India’s export growth with the world stagnated, export growth to North America doubled from the corresponding period last year to 15% growth in Q2 2019.
North India, which delivered an increase of 18% this year as opposed to 1% last year along with the contribution from the West and South India led to this export growth, while growth from East India shrunk.
A large part of this growth can be attributed to textiles & apparels, and metal exports to North America, which rose by 14% as compared to the same period last year. However, India- made vehicles saw the sharpest fall in growth from 67% last year to 11% this year.
On the import side, while domestic demand for textiles, apparel & accessories from North America grew, commodities such as fruits and nuts, vegetables and foodstuff experienced a weakening demand.
In conclusion, Felder said, “Additional to all the opportunities that lay ahead for India, the Government also recognizes the importance of global trade which is evident from the creation of a dedicated ‘Logistics Wing’ that will integrate and enhance the numerous elements of the logistics value chain.”
“That coupled with adoption of new technologies such as Blockchain and Artificial Intelligence across the logistics network, and concerted efforts towards the improvement of infrastructure at ports and roadways will ensure last-mile connectivity for farmers, MSMEs and small businesses. All these factors combined can help in driving economic growth and trade competitiveness of India.”