Indian Exports Report Highest-Ever Monthly Figure
India's exports reached a new high of $37 billion in December 2021 and are expected to reach $400 billion in FY22. Come check out our article to learn more.
As 2021 came to a close, India was showing signs of strong economic recovery with December’s exports increasing by 37% on an annual basis. Exports from the period between April and December were $300 billion, representing an increase of 48.85% on-year. The latest figures released in January also predict the figure will rise by another $100 billion by April 2022.
In light of this news, Union minister Piyush Goyal stated, “this growth is satisfying and we must aspire for more.” Between October and December of 2021, India had generated $103 billion from exports, a record-high, demonstrating what the country may be capable of in the future.
Labor-Intensive Industries Show Promise
In particular, engineering products, petroleum products, gems, jewelry, chemicals, and yarn were the exports responsible for driving the greatest growth in December. Many of these sectors are labor-intensive, which is a good indicator that this boost in exports will help to further support the Indian economy by providing jobs.
Since 2020, India’s exports of gems and jewelry have doubled and its chemical industry continues to outperform and show promise. From 2006 to 2019, India’s chemical industry grew at a compound annual growth rate (CAGR) in TRS of an impressive 15%, a number significantly higher than that of the global chemical-industry return. India’s booming export economy may reflect the strengthening of some of its key industries, such as the chemical industry.
The Impact of COVID-19 on India’s Export Market
Many developed countries such as the US, which India relies on for key export markets, are feeling the effect of the third wave of COVID-19. Some experts warn that India’s exports may feel a delayed impact of the challenges these countries are experiencing. Such disruptions wouldn’t be felt immediately, so some are cautious of betting on India’s sport market.
According to the latest data by the National Statistical Office (NSO), over the current financial year, India’s economy is predicted to grow 9.2%. However, this impressive growth is helped by the fact that the previous year saw the economy contract by 7.3%.
With this growth, India’s gross domestic product (GDP) will rise by 1.3% from pre-COVID levels. However, the data also indicated that weaknesses exist in the contact-intensive services sector, which would undermine growth if cases of COVID-19 began to rise again.
Unfortunately, the virus is once again spreading rapidly throughout India. This spike in infections is causing a sense of uneasiness around the upcoming state elections where millions will come into close contact as they attend rallies and polling stations. Given that vaccination coverage is very uneven across India, and many lack access to basic healthcare, experts are growing increasingly concerned that the election could further encourage the spike of COVID-19 infections.
While the outlook for India’s export industry looks positive, it is not immune to the effects of the pandemic, meaning predictions of rapid growth should be understood with a sense of caution.
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