India’s manufacturing activity revived in July and posted the strongest growth in three months along with a marginal increase in employment as states eased localised restrictions.
Backing the recovery in manufacturing, official data released Monday showed India’s exports rising a sharp 48% year-on-year to a record $35.2 billion in July, buoyed by a growth in petroleum products, gems and jewellery, and engineering goods. Imports last month were at the second highest in history.
“Make in India, Make for the World: India’s merchandise exports in July 2021 was $35.17 bn, an increase of 34% over July 2019.PM @NarendraModi ji’s vision for Aatmanirbhar Bharat has given a boost to exports,” said commerce and industry minister Piyush Goyal in a tweet.
After slipping into contraction for the first time in 11 months in June, the seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index moved back above the critical 50 threshold—that separates expansion from contraction—in July at 55.3, pointing to the strongest rate of growth in three months.
The reading for June was 48.1.
“Operating conditions in India improved during July, after growth was halted by the escalation of the pandemic in June,” IHS Markit said in a report.
Output, new orders, exports, quantity of purchases and input stocks all returned to expansion territory, while a marginal increase in employment ended a 15-month sequence of job shedding.
Strengthening international demand contributed to the uptick in total order books. New export orders expanded markedly in July, following a moderate contraction in June. In tandem with sales growth and rising production requirements, manufacturers hir ed extra workers in July, it said.
Led by petroleum products, gems and jewellery, and engineering goods, India’s exports rose 47.9% on-year. Preliminary data released by the government showed that India’s merchandise exports in July were $35.17 billion, an increase of 34% over July 2019. Imports at the were $46.4 billion, leaving a wider trade deficit of $11.23 compared to $9.4 billion in June and $5.33 billion a year ago.
“Till July, India’s merchandise exports have reached 32.64% of $400 billion,” the commerce and industry ministry said.
Geography-wise, the top increases in exports were seen to the US, UAE and Belgium while imports from the UAE, Iraq and Switzerland rose the most. The top import items were crude oil, gold and precious stones, and vegetable oil.