Merchandise exports up after 6 months, Covid-19 may hurt recovery

New Delhi: Merchandise exports showed a mild recovery in February after contracting for six consecutive months amid fears that the Covid-19 pandemic could pause the recovery process. Exports rose 2.9% on year in February while imports grew at a slower pace of 2.5% leading to a narrowing of trade deficit at $9.8 billion in the month, data released by the commerce and industry ministry showed on Friday.

“Despite global challenges, Indian exports once again enter into growth trajectory in Feb 20 after a gap of 6 months. Exports of electronic goods and Chemicals grow at 37% and 16% respectively,” commerce and industry minister Piyush Goyal said in a tweet.

Trade deficit was $15.17 billion in January. Out of the 30 major export items, 16 categories showed growth.

“In the wake of Novel coronavirus, which not only pulled down the global sentiments but also affected the supply chain both internationally and domestically, such modest growth is encouraging,” said Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf.

However, Saraf cautioned that the impact of pandemic will be more visible in exports March onwards.

While exports of pharmaceuticals grew 8.33%, chemicals rose 16.3%, engineering goods increased 8.7%, electronic goods expanded 37% and petroleum products picked up 10.1% in the month, shipments of gems and jewellery and readymade garments continued to contract. They shrank 20.1% and 4.5%, respectively.

Global players including China, US, economies of Europe, Japan, South Korea, Australia, Russia and the Gulf countries are also facing the brunt as oil and commodity prices have shown a drastic decline in recent days, he said.

Among major imports, petroleum products were up 14.3%, plastic materials rose 0.45%, and precious stones grew 13.2%.

Going with the current trend, FIEO expects 2019-20 goods exports to remain in the range of $320-325 billion. The country had clocked $331 billion of exports in 2018-19.