India met its $400 billion export objective but how?

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With nine days left in the current financial year 2021-22, India met its lofty goal of exceeding $400 billion in exports. With this, India has reached a significant milestone on its path to becoming an ‘aatmanirbhar.’

Exports have already surpassed $400 billion for the first time in history. The previous high point was $331.02 billion, set in 2018-19.

India’s exports increased by roughly $25.19 billion in March, bringing the total to around $410 billion by the end of the fiscal year.

According to figures issued by the ministry of commerce and industry on March 14, India’s merchandise exports for the period April-February 2021-22 were $374.81 billion, up 46.09 percent from $256.55 billion in the previous year’s similar quarter.

Exports of products increased by 25.1 percent year over year to $34.57 billion in February 2022.

Make in India Blockbuster

This achievement has been dubbed a “Make in India blockbuster” by Commerce and Industry Minister Piyush Goyal.

If this were a movie, it would be termed a Make in India blockbuster, he remarked at an official conference. India accomplished this milestone despite all challenges, including the Covid-19 epidemic and the Russia-Ukraine war.

Closer connection with states and districts, involvement with exporters, speedier resolution of their difficulties, and active engagement with various export promotion councils, industry groups, and other stakeholders all contributed to the achievement of this milestone, Indian people times said.

Prime Minister Narendra Modi praised the country’s achievement in a tweet earlier in the day, calling it an “important milestone” in India’s “Aatmanirbhar Bharat” mission.

Exceptional performance

One of the main drivers of India’s economic growth is exports. The Centre’s aim for merchandise exports in FY22 is expected to be much exceeded.

When the government began to lift Covid-related restrictions, the industry was one of the few to swiftly return to pre-pandemic levels.

Exports showed a strong indicator despite the disastrous second wave of Covid-19 in April-May 2021. Since March of last year, it has stayed over $30 billion.

Monthly exports increased by 38.91 percent year over year (y-o-y) to $37.81 billion, the highest level ever. In 2022, the trend continued, with exports totaling $34.6 billion in January and $34.57 billion in February, representing increases of 23.4 percent and 25.1 percent, respectively.

Except for a brief period in March 2019, India’s goods exports had never exceeded $30 billion.

Compared to a year before, goods exports increased by 36.25 percent in April-February 2021-22.

The most important factors

Higher shipments of engineering, petroleum, and chemical items fuelled the increase in exports from April to February.

Exports of engineering goods, petroleum, and chemicals increased by 32 percent, 88.14 percent, and 25.38 percent in February, respectively, to $9.32 billion, $4.64 billion, and $2.4 billion, according to the latest data released by the commerce ministry.

In February, however, pharmaceutical exports fell 1.78 percent to $1.96 billion.

In comparison to the previous year, engineering products exports climbed by 50%. Rice (other than basmati), marine goods, wheat, spices, and sugar all contributed to the biggest number of agricultural products shipped in FY22.

What caused the uptick?

One of the key causes for the increase in exports is an increase in pent-up demand, which had declined as a result of the Covid epidemic, which compelled countries to remain under strict lockdown, affecting global commerce.

Exports have also increased as a result of increased local manufacturing owing to production-liked incentive (PLI) programs and the adoption of several temporary trade agreements.

The Indian government stated at a news conference that the $400 billion objectives were reached through a bottom-up method, with the trade potential of other countries being appraised based on historical trends.

According to them, exports were reviewed by-product as well as by state, and the administration targeted 200 nations and territories.

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