Exports Rise 5.27% In Sep, Trade Deficit Narrows To $2.91 Billion
We are all familiar with the impact that Covid has led to our global trade platform. The change of events have let an extreme set back in the global economies, forcing businesses to shut down and workers going on lockdowns. The past few months have been very devastating for global trade as it reached the lowest levels, affecting businesses at every level on the supply chain.
In the wake of the pandemic, there has been some positive news. The latest development being the rise in esports to 5.27 per cent which presents a strong comeback for the trade industry. During April-September of the present year, the global trade cycle represents a sharp decrease of 51.14 per cent that is equal to USD 31.85 billion. On the other hand, Non-oil imports also presented a steep fall of 14.41 per cent to USD 24.48 billion for the month of September.
If we come down to India’s exports over the last year, the country showed a positive rise with increased exports by 5.27 per cent on the year-on-year basis when compared to the charts in September, the market showed a forecast of USD 27.4 billion. If we take a closer look at the trade, India has made a comeback with increased exports in iron ore trade, pharmaceuticals, and farm products as these are some of the most demanding items post-Covid by some of the major countries around the globe.
However, when we talk about imports, they have taken a hit and have decreased by 19.6 per cent to USD 30.31 billion. As per the reports by commerce ministry data which was released recently, “The contraction in imports, seen by analysts as a sign of a weaker recovery by Indian industry and lower oil prices, narrowed the trade deficit to USD2.91 billion against USD11.67 billion in September 2019.”
Talking about their recovery rate, Sharad Kumar Saraf, President of Federation of Indian Export Organisations (FIEO) pointed out that, “We have made a good recovery, but it’s mostly in raw materials," he further added that. "We have huge stocks of farm produce and need to sell them to make space for our Kharif crop, hence the added impetus to sell".
India’s increased exports are a result of reduced supply that have affected the other countries for six-months in a row. With China being the major buyer of the Iron ore from India, it has increased the demand to more than double. Marking a growth of 109.52 per cent. Talking about the sudden increase in demand of Iron ore, Prof Biswajit Dhar of the JNU and a member of the Board of Trade explained, "The Chinese have got over the Covid hump and are spending on infrastructure projects which is why they are importing raw materials like iron ore."
Lastly, the other products to have showcased improved rise are rice which went up by 92.44 per cent, oil meals (43.9 per cent) and other essentials like the pharmaceuticals and dairy products