Owing to the staggered supply and demand shocks across geographies caused due to the outbreak of the pandemic along with challenging economic indicators in Q2 and Q3, Indian containerised trade has been severely impacted in 2020, Maersk said on Thursday.
It further added that while exports have recovered strongly, imports remain subdued with signs of slow recovery coming in towards the end of the year.
During Q3 of 2020 (July to September), the Indian containerised trade contracted by about 8% as compared to the same period last year. However, comparing to Q2 of 2020, there has been a 31% increase in volumes, indicating that trade is on a path of recovery.
Exports out of India are up by 14% over Q3 of last year while they are 47% higher than Q2 of 2020. Imports are however 28% lower than Q3 of 2019, but have recovered by more than 30% from Q2 2020.
“Changing patterns in retail behaviours are reshaping the supply chain trends to an extraordinary extent, leading to a growing focus on risk mitigation and resilience-building, while dealing with threats of growing trade protectionism.”~Steve Felder, Managing Director, Maersk South Asia
The release said that a rise in demand for Indian textiles and apparels, especially to the North American markets, has driven tremendous growth in exports in the past quarter.
Textiles and apparels contribute a quarter of exports to North America and these volumes delivered a growth of 10% over the same quarter last year. The exports of textiles and apparels to the Mediterranean markets also grew by 10%.
Other commodities that witnessed growth in exports include tile, stone and glass to the North European region, and seeds, beans, cereal and flour to the Middle East and Mediterranean countries.
As per the release, the Q3 of 2020 was yet another quarter where imports were lower than the same period in 2019, however there is some growth compared to Q2 of 2020.
Imports of commodities such as paper, metal, appliances and kitchenware have increased since the last quarter, though they are far below the levels in the same period last year.
Giving an outlook into 2021, the release stated that as trade continued to navigate foggy conditions, the most recent trends indicated that an overall recovery of import-export trade in India will begin in the first half of 2021.
“’China + 1’ sourcing strategies are benefitting South East Asian countries, and there is much potential for India to take advantage of this shift. Key factors favouring this development are Government’s initiatives to attract investments, focus on developing port and landside infrastructure, technology adoption and automation, lower labour cost and availability of raw materials.”~Steve Felder
He further added, “An impetus towards long-term policy reforms should encourage local manufacturing, and developing bilateral and multilateral trade partnerships hold the potential to propel India further, and support its economic growth.”