Exports up 0.67% in Februrary; trade deficit widens to $12.62 billion
Growing for the third consecutive month, the country’s exports rose marginally by 0.67% year-on-year to $ 27.93 billion in February even as trade deficit widened to $12.62 billion, according to official data released on Monday.
Imports rose by 6.96% to $40.54 billion in the month, the data showed. The trade deficit in February 2020 was at $10.16 billion.
Exports during April-February 2020-21 period contracted by 12.23% to $ 256.18 billion compared to $291.87 billion in the year-ago period. Imports dipped 23.11% to $340.8 billion in April-February.
In February, oil imports declined by 16.63% to $8.99 billion while during April-February the shipments were down by 40.18% to $72.08 billion. Gold imports in February jumped to $5.3 billion from $2.36 billion in the year-ago month.
Sectors which recorded positive exports growth during February include oilmeals, iron ore, rice (30.78%), carpet (19.46%), spices (18.61%), pharmaceuticals (14.74%), tobacco (7.71%), and chemicals (1.2%).
Sectors which recorded negative growth include oilseeds, leather, petroleum products, cashew, gems and jewellery, RMG (ready-made garments) of all textiles, tea, engineering goods, coffee and marine products.
Commenting on the data, Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf pointed out that the marginal growth in exports was mainly on account of container shortages across the country which limited supply in the last week of the month due to increasing COVID-19 cases in certain states.
Rising exports from China have led to the shortage of containers in the region as most of the empty containers are available only for exports from China, as the shipping lines and container companies are being paid hefty premiums for bringing empty containers back to China, he said.
He asked that the government must address some of the key issues including timely announcement of the new foreign trade policy, adequate availability of containers, release of the required funds for RoDTEP, and softening of freight charges.
ICRA Ltd Principal Economist Aditi Nayar said that although a favourable base effect will push up the growth of both imports and exports in March 2021, “we expect the trade deficit to widen to $13.5-$14 billion in the ongoing month”.