India sets $400 billion export record: Its significance and key drivers of growth

What is the significance of India achieving $400 billion in merchandise exports in the fiscal?

The achievement of $400 billion in merchandise exports represents a growth of over 21 per cent in exports compared to the previous record high of $330 billion achieved in FY2019 prior to the Covid-19 pandemic. Experts have noted that one of the key factors driving the surge in exports is pent up demand that was not met during major waves of the Covid-19 pandemic. Expansionary monetary policy by developed economies in response to the economic impact of the pandemic has also boosted demand for Indian exports.

Source: Department of Commerce

What areas have been the key drivers of India’s export growth?

Areas that have been key drivers of India’s export growth include engineering goods which have seen a growth of 49.7 per cent in the first 11 months of the fiscal, electronics goods exports which have grown by 42.8 per cent and gems and jewellery exports which have grown by 57.3 per cent. Export of petroleum products have grown by 147.6 per cent driven by a steady increase in crude oil prices.

What has been the increase in imports?

While exports have grown sharply India’s merchandise imports have grown even faster reaching $550 billion in the first 11 months of the fiscal through sharp growth in imports of crude oil, coal, gold, electronics and chemicals. Rising prices of commodities including crude oil and coal have played a significant role in adding to India’s import bill and taking the trade deficit for the first 11 months to a record high of $176 billion.

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