India’s Quarterly Exports Cross $100 Billion For The First Time – Free PDF Download

What has happened?

• The ministry of commerce and industry said on Saturday that India reported $101.89 billion in exports in the quarter ending September.
• This is the first time that Indian exports have crossed $100 billion mark.
• In September alone, the exports stood at $33.44 billion, according to government data.
• In August, the figure was $33.28 billion.
• The highest export amount in the second quarter was recorded in the month of July ($35.17 billion).

Why this deficit?

• The trade deficit in September was at $22.94 billion as gold imports jumped nearly 750% to $5.11 billion.
• The imports of ‘petroleum, crude and products’ soared nearly 200% to $17.436 billion in September on an annual basis.
• The data also showed that imports of ‘coal, coke and briquettes’ were up 82.89% at $2.18 billion in September 2021 over the same month last year.

Target of $400 billion

• The Modi government has set an export target of $400 billion for financial year 2021-22.
• Until September, that is in the first six months of the current financial year, almost half of that target stood achieved.
• Exports from India till September this year touched $197 billion.
• This is an increase of no less than a whopping 56.92% in the year-ago.

Is it achievable?

• India’s success comes in the backdrop of the global pandemic which had disrupted the supply chain market.
• China – the world’s factory dropped the towel and countries across the globe were left scrambling around in search for alternatives.
• Sensing a window of opportunity, the Modi government swooped in and in March last year, launched the PLI scheme and fast forward to today, the same has been extended to nearly 13 vital sectors of the economy.
• With six more months to go, the target of $400 billion exports looks well attainable.
• With the introduction of the PLI scheme in the textiles sector, the Union Textiles Minister, Piyush Goyal has set eyes on the target of textile exports worth 44 billion dollars by next year, compared to the current 33 billion dollars.

But is it sustainable?

• There are two reasons to be cautious.
• The first point of caution is the nature of items driving the ongoing export growth.
• Primary commodities—essentially, goods available from cultivating raw materials without a manufacturing process—are behind the current boost.
• The largest gainer in exports vis-à-vis last year is petroleum products, and this is attributable largely to the rise in oil prices and the sharp recovery in mobility.
• Some of the other commodities that have registered the biggest increases over 2019—both in value and volume terms— are ores, metals, cotton and sugar.
• In this context, experts warn off the ‘bullwhip effect’, wherein the post-pandemic economic recovery globally causes a spike in demand for primary goods.

• The second point of caution is related to the international transportation of goods, which happens mainly via ships.
• Due to the pandemic, the number of ships, and containers in circulation fell.
• Meanwhile, world trade is topping pre-pandemic levels.
• The Baltic Dry Index, a measure of shipping transportation rates, is up nearly 200% in calendar 2021.
• The shortage of containers is also creating congestion and increasing processing time at Indian ports.
• In addition to general competitiveness on cost and quality, how corporates in India navigate these two factors will have a bearing on the sustainability of the current export upswing.

Q) Which among the following was established by a multilateral treaty of 23 countries in 1947?

1. World Trade Organisation
2. United Nations Conference on Trade & Development
3. General Agreement on Tariffs and Trade
4. North American Free Trade Agreement

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