India’s exports registered a 45.17% increase in August 2020, making it $33.1 billion last month. The exports showed a consistent rise since April 2021.
Last year during August, the country’s exports stood at $22.83% billion, published in an article by Business Today. Due to the low base effect, the export of merchandise goods increased by $193.63% in April this year. The merchandise exports rose by 27.5%.
Noting the graph of exports going up, Minister of Commerce and Industry Piyush Goyal applauded the progress and expressed positivity towards India making its way to the target set by the Prime Minister for the year.
USD 400 billion export target announced
Prime Minister Narendra Modi set a $400 billion exports target for the fiscal year 2021-2022. It is part of the 2 trillion export target till 2030, and it will help GDP reach 15%, published in a government press release.
The target collaborates with the private, MSME and agriculture sectors and automobile and steel industries, followed by efforts to boost the economy.
The Ministry of Commerce encouraged startups that boasted about 1.8 lakh jobs during the year 2020-2021.
Despite the second wave of Covid-19, India accomplished the highest rate of exports in the first quarter (April-June) of 2021, according to an article published by NDTV Profit.
The government brought incentives to promote new businesses (50,000 new startups from several districts) and uplift existing ones which accelerated the pace even while the country slowed down.
Exports to increase as Ministry aims to broaden foreign markets
To stick to the goal target for the fiscal year, India is looking to improve its exports before the year’s end. The government has informed all foreign ambassadors and commissioners to track the market and expand export share in various countries.
An article in Economic Times reports that India seeks to double its UK, US and UAE exports. The country aims to expand its exports by 32% in the US market, 110% for UAE and 49% in the Singapore market.
But as the exports have been reaching new heights, imports are increasing too, causing high levels of trade deficit for India.
What is the trade deficit?
The trade deficit is a situation wherein a country’s imports exceed its exports. It is considered harmful in the Balance of Trade (BOT).
Trade deficit not only impacts the pace of production but also has implications on jobs. It reflects the efficiency of an economy to produce its goods and services.
India reported a trade deficit of $13.87 billion in August, four times high in the first quarter. It was higher than the trade deficit reported in August 2020, which was around $8.2 billion. According to an article published by Times Now, the credit for the high levels of imports goes to gold.
The above-provided infographic shows how imports have constantly been rising since the year 2019.
In August alone, gold imports were worth $6.7 billion. Aditi Nayar, an economist at ICRA, expressed concerns that imports may rise to $40 billion in the coming years if the demand for gold keeps increasing. The Hindu published the statement.
After the economic shutdown during the first wave of Covid-19 that hit last year, Indian exports increased from December 2020. The list of exports contributing to India’s revenue includes mineral fuels, metals, machinery, etc.
According to FIEO President Sakthivel, recovery in global trade and a rise in demand and bookings for Indian goods have led to increased exports. He added that this rise would benefit the economy. Economic Times reported the information.