The trade deficit in goods stood at $6.28 billion, the lowest in eight months. The trade deficit was $15.10 billion in April and $3.15 billion in May 2020. Imports in May were up 73.64% year-on-year to $38.55 billion, data showed.
“The widening state-level restrictions shrunk the imports of crude oil and gold, narrowing the merchandise trade deficit to an eight-month low in May 2021,” said Aditi Nayar, chief economist, ICRA.
Exports to the US, UAE and Singapore recorded the highest jumps, according to data. Exports of engineering, petroleum products and gems and jewellery in May were worth $8.64 billion, $5.33 billion and $2.96 billion, respectively.
“The order booking position of our exporters is not only extremely good but also the gradual opening up of major global markets and improvement of situation in the country is expected to push exports growth further,” said Sharad Kumar Saraf, president, Federation of Indian Export Organisations.
Engineering Export Promotion Council said that while the export outlook has been projected to be positive in the current fiscal, there were downside risks too, given that public health experts have predicted a possible third wave of Covid-19 and sought targeted policy intervention.
“Efforts must be made now to minimise the impact of the pandemic on trade and business, as protecting livelihood is no less important than lives,” said EEPC chairman Mahesh Desai. “The plans should be in place to ensure the goods’ movement, especially export consignments, is not affected by lockdowns, night curfews or any other restrictions imposed by states to prevent the spread of the virus.”
Desai said he hoped that the rates for the export promotion scheme RoDTEP would be announced shortly and provide more targeted support, as suggested by the Reserve Bank in the last monetary policy review.
Gold imports in May increased by 790% from a year ago to $679 million, data showed. Oil imports grew 171% to $9.45 billion compared with $3.49 billion in May 2020.
Non-oil and non-gold imports in May increased by 52.48% year-on-year. Taken together with services, India registered an overall trade surplus of $1.6 billion in May. Exports during April-May this year jumped to $62.89 billion, as against $29.41 billion in the same period last year.
Nayar said the steady exports over April-May 2021, despite the second surge in Covid-19 infections and associated lockdowns, are heartening, suggesting that India may be well poised to benefit from recovering demand in the advanced economies.
Desai said growth in outbound shipments has been robust over the last few months and the outlook remains positive for the current year, but rising cost of key raw materials, especially steel, is a concern.
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