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Exports decline by 34.57% in March as COVID-19, lockdown snap supply chains

Coronavirus (COVID-19): Experts have termed this the highest drop in exports in recent times.

coronavirus, coronavirus news, covid 19 tracker, covid 19 india tracker, coronavirus impact on ecoomy, coronavirus impact on exports, coronavirus impact on import Imports, too, dropped over 28 per cent in March 2020. Merchandise trade deficit narrowed to .76 billion in March 2020 from billion in March 2019. (File Photo)

Coronavirus (COVID-19): The ongoing pandemic caused by the novel coronavirus outbreak across the world has dealt a blow to Indian merchandise exports, with overall shipments dropping 34.57 per cent in March. Experts have termed this the highest drop in exports in recent times.

“The decline in exports has been mainly due to the ongoing global slowdown, which got aggravated due to the current Covid-19 crisis. The latter resulted in large-scale disruptions in supply chains and demand, resulting in cancellation of orders,” stated the Commerce Ministry.

Except for exports of iron ore, which grew 58.43 per cent, all other commodity/commodity groups registered negative growth last month compared to March 2019. According to the Federation of Indian Export Organisations (FIEO), this is the highest ever double digit decline in exports in recent times, and recovery is only expected after the second quarter of the 2021 financial year.

Imports, too, dropped over 28 per cent in March 2020. Merchandise trade deficit narrowed to $9.76 billion in March 2020 from $11 billion in March 2019.

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Explained

Pandemic fallout

Covid-19 has not only pulled down the world sentiment to its lowest but has also affected the global supply chain and brought economies in recessionary condition.

Top commodities like engineering goods saw over 42 per cent drop in shipments. Exports of other commodities that register billions of dollars worth of exports every month also declined anywhere between 20 and 41 per cent. Among major import commodities, there was a 15 per cent decline in petroleum and crude, 29.09 per cent drop in electronic goods, 31.72 decline in electrical and non-electrical machinery, 53.46 per cent drop in pearls, precious and semi precious stones and 62.64 drop in gold imports. As per India Ratings and Research chief economist Devendra Kumar Pant, the data “clearly” shows weakness in global demand, weakened by COVID-19. The drop is the highest in the last six years “at least”, he said.

coronavirus, coronavirus news, covid 19 tracker, covid 19 india tracker, coronavirus impact on ecoomy, coronavirus impact on exports, coronavirus impact on import

“Both exports and imports have declined in FY20, leading to a 17 per cent decline in the trade deficit. Decline in trade/current account deficit, coupled with significant forex reserves, is giving stability to currency at a time of capital flight from India,” he told The Indian Express.

Exporters were not able to export during the second half of March due to the 21-day nationwide lockdown as well as due to cancellations and delay of shipments and orders.

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First published on: 16-04-2020 at 01:56:17 am
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