Indian exporters experience surge in global demand
NEW DELHI : In a boost to Indian economy, Indian export books have reportedly swelled up to 40% in the current fiscal. This comes as a sign of relief as global demand had taken a hit back in 2020, when the pandemic struck.
This also comes after February recorded gloomy trade deficits, with exports dipping by 0.3% to $27.7 billion and imports rising by 7% to $40.6 billion. This came at the backdrop of falling oil prices in the world economy.
Reportedly, higher international demand, particularly for engineering items, chemical substances and low-value life-style merchandise like carpets, has made Indian exporters’ order books swell by a significant 40% in comparison with the pre-Covid-19 interval.
This comes after better vaccine confidence amongst nations and falling Covid cases in America. European Union and India witness new surge of mutating virus in their region; thus this has the potential to obliterate demand in the long run. Therefore, it would be interesting to see whether this growth sustains in a long-term period or not.
Ajay Sahai, Director General of Federation of Indian Export Organizations (FIEO) stated that “Our exporters’ order books have improved by almost 40% compared to the pre-Covid-19 period,”.
The increase in world demand for Indian handicrafts and low value lifestyle merchandise like carpets will prove beneficial for Indian job market. Sahaj optimistically stated that labor-intensive sectors comparable to handicrafts, ceramic merchandise and cotton yarn/materials too are exhibiting indicators of additional strengthening and thus will help in rectifying the India’s unemployment woes.
Mahesh Desai, Chairman of Engineering Exports Promotion Council, stated that “There is a gradual restoration in international commerce which can have a positive influence on the export sector in India,”. Exports in iron and metal, and non-ferrous metals like cooper, apart from auto elements, have recorded double digit growth due to increased demands from countries like China, Germany, Singapore and Thailand.
Reportedly, the handicraft sector expects an export progress of about 30% within the ongoing quarter. “The order book is agreeable but there is a 25-27% rise in prices of raw materials such as wood and metals, and labor costs,” stated EPCH govt director Rakesh Kumar. Business within the ongoing quarter could attain the identical degree because the corresponding quarter of 2019, led by furnishings, house and life-style merchandise whereas vogue jewelry section has but to see a pickup, he stated.
Although, there may be demand from the US due to flattening of Covid-19 circumstances, the typical exports have declined to 40-60,000 pairs of sneakers in a season from 50-70,000 pairs from pre pandemic period.
In addition to increase in global demand, there have been indicators, indicating towards domestic demand returning to normal. In February, non-petroleum imports were estimated to have gone up by 16.5% indicating that demand in domestic market was returning to pre pandemic level. The surge in exports in 2021, compared to 2020, indicates economic growth in Indian economy.
India during pandemic, had recorded surge in exports, which was emphatically due to fall in imports in the economy and not due to increase in global demand. Since Indian imports consist of demand for input goods which are used to create industrial outputs, decrease in imports indicated decline in domestic and global demand.
In contrast to the last year’s gloomy scenario, currently India witnesses surge in both the imports and exports, which highlights increase in domestic and global demand, taking economic activity to the pre pandemic level.
Though India sees surge in its domestic and global goods, the exports are not up to the pre pandemic level yet, as leather exports from India shrank 32.16% year-on-year within the April 2020-February 2021 interval whereas handicrafts contracted 8.49%.
As explained earlier, unlike the pre-Covid period, when orders would come months upfront, orders now are available at a brief time period and must be fulfilled quicker, making it tough to plan the enterprise.
India’s exports between April 2020 and February 2021 amounted to $256.18 billion, down 12.23% year-on-year.
Siddh Nath Singh, Chairman of Carpet Export Promotion Council stated that “The UK, EU and China are disturbed because of the pandemic and the order book has been impacted because of that. We expect our exports to decline 20-25% by the end of March,”
Source : ET