December 2020: Exports 0.8% down, imports rise

Indicating a pick-up in economic activity, imports went up for the first time since February, rising 7.6% to $42.6 billion in December, while exports were 0.8% lower at $26.9 billion on account of lower shipment of oil products to UAE and parts of Europe.

As a result, trade deficit widened to $15.7 billion, the highest since January 2020, according to preliminary numbers released by the commerce department on Saturday.

Drugs and pharmaceuticals, chemicals, electronic goods and iron ore were among sectors that reported double-digit export growth, with the fall in oil prices resulting in a steel 40% decline in the value of petrol and diesel shipped out of the country to $2.2 billion in December. Although countries such as Singapore have stepped up purchase of fuel from India, large buyers such as UAE have slashed imports by nearly 50%, pushing down overall exports of petrol and diesel from country.

At the same time, among the major export items, there were nascent signs of recovery in case of gems and jewellery (6.7%) and engineering goods (0.1%), although readymade garments languished, falling 15% in December as large parts of the globe continued to work from home.

The numbers indicated that non-oil exports had witnessed a 5.3% to $24.7 billion.

Exporters, however, appeared positive, especially with vaccination against Covid-19 starting in many parts of the world, including the US and the UK. 

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