India’s exports hit a record high of $418 billion in 2021-22
NEW DELHI : India’s merchandise exports hit a record $418 billion in 2021-22, beating the government’s target by around 5% and recording 40% growth from a year earlier, according to official data.
Exports hit $40.38 billion in March from $34 billion a year earlier, driven by robust growth in petroleum products, engineering, gems and jewelry, chemicals and pharmaceuticals , according to data released by the Ministry of Trade and Industry on Sunday.
The Department of Commerce had set a merchandise export target of $400 billion for 2021-22, up from $292 billion in 2020-21.
“India exported $418 billion for the first time in its history. It’s more than the goal. It crossed $40 billion in exports in March alone, the highest in a single month. India’s diversified export portfolio in 2021-2022 shows India’s manufacturing capabilities and growth in high-tech goods, electronics and agricultural products,” the Minister of Trade and Commerce said on Sunday. of Industry, Piyush Goyal, during a press briefing.
The Minister pointed out that India’s Free Trade Agreements (FTAs) aim to increase exports of finished or intermediate products. “Iron ore and cotton are two raw materials that we export massively. We also largely export processed products. The FTAs we are negotiating also aim to increase exports of value-added goods,” he said.
Commerce Secretary BVR Subrahmanyam stressed that India is no longer an exporter of primary commodities.
India reached an interim trade deal with Australia on Saturday, with more than 95% of Indian goods enjoying duty-free access to the Australian market from the day of the pact’s implementation. In February, India and the UAE also signed a Comprehensive Free Trade Agreement, which will immediately eliminate tariffs on 90% of Indian exports in terms of reduced value to the UAE, covering sectors such as as gemstones and jewelry, textiles, leather and engineered products from the day the pact comes into effect.
India’s exports are gradually shifting towards manufactured goods, visible in exports of engineering goods and electronics, said Director General of Foreign Trade Santosh Sarangi. Electronics are one of the main items in India’s import basket, after gold. These saw a 40% jump in FY22, following a massive push in the production-linked incentive program, Sarangi said.
Exports of non-oil goods rose more than 30% to $352.76 billion.
Exports are better than expected, said Aditi Nayar, chief economist, Icra. “We expected merchandise exports to reach $415 billion, and robust exports in March led to that figure being crossed. Some of the upside may have been driven by rising commodity prices, but the performance was commendable,” Nayar said. With that, the current account deficit is expected to narrow to less than $20 billion in the fourth quarter of 2021-22, from $23. billion in Q3.
Economists expect imports to also hit an all-time high due to high crude oil and commodity prices around the world. Imports rose 51% to $589 billion in the last fiscal year, leading to a widening trade deficit to $189 billion. India’s top five export destinations are the United States, United Arab Emirates, China, Bangladesh and the Netherlands.
A significant portion of the $418 billion in exports goes to developed countries, Sarangi said. The United States is our largest market for engineering goods, while the United Arab Emirates is our largest market for petroleum products. The Netherlands is the largest market for medicines and pharmaceuticals.
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