India’s trade deficit has widened, as imports rose 6.98% during February. The country’s goods exports declined marginally by 0.25% to $27.67 billion (year-on-year) after increasing for two consecutive months as major commodities, including petroleum, engineering goods, gems & jewellery, ready-made garments and leather produce suffered a set-back.
On a positive note, exporters’ body Fieo pointed out that the month’s fall in exports was marginal and signs of revival continued not only in the order booking positions but also in the demand from across the globe. “This could pave the way for much better days and months ahead for the sector,” Fieo President S K Saraf said.
One area of concern that needed to be addressed was the rising exports from China which had led to a shortage of containers in the region as most of the empty containers are available only for exports from China. This is due to shipping lines and container companies being paid hefty premiums for bringing empty containers back to China.
“While the overall non oil imports were in line with our expectations, this masks a spike in gold imports, counter-balanced by a month-on-month dip in non oil non gold imports,” said Aditi Nayar, Principal Economist, ICRA Limited.
Following the Budget, in February 2021, gold imports surged to the highest level since November 2014, she said, adding that with gold imports remaining elevated for the last three months, the total value of shipments in the current fiscal year may modestly exceed the level of $28.2 billion seen in the previous.