January 2021: Exports Up

India’s merchandise exports rose for the second consecutive month in January and at a faster pace than seen in preliminary estimates released earlier this month. In an indicator of the recovery in domestic demand, imports increased and the country’s trade deficit narrowed to $14.54 billion.

The trade gap was $15.3 billion in January 2020 and 15.44 billion in December.

Merchandise exports rose 6.16% on-year in January to $27.45 billion while imports grew 2.03% to $41.99 billion in the month with gold imports rising a sharp 154.7% to $4.03 billion.

Exports had grown 0.14% year on year in December.

Of the 30 major export sectors, growth was seen in 22. Non-oil, non-gold, silver and precious metals imports — an indicator of the strength of domestic demand — were $26.35 billion in January, recording a growth of 7.5%.

However, cumulative exports during April-January 2020-21 contracted 13.58% to $228.25 billion as against $264.13 billion during the same period last year.

Imports growth in January was led by gold, electronics goods, and pearls, precious and semi-precious stones.

“The trade deficit has sustained at a high level for the second consecutive month, which is a testament to the recovery in domestic demand, as well as the impact of higher commodity prices following the resurgence in global confidence,” said Aditi Nayar, principal economist at ICRA.

As per the data, oil imports rose 27.7% at $9.40 billion while non-oil imports rose 15.8% at $32.58 billion.

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