This is the first time ever that exports have crossed the $400 billion-mark. The previous best was $331.02 billion that was achieved in 2018-19.
India added around $25.19 billion worth exports in the month of March so far and may finish at about $410 billion by the end of this fiscal.
According to data released by the ministry of commerce & industry on March 14, India’s merchandise exports for the period April-February 2021-22 stood at $374.81 billion as against $256.55 billion during the period April-February 2020-21, registering a growth of 46.09 per cent.
In February 2022, merchandise exports surged to $34.57 billion, registering a year-on-year growth of 25.1 per cent.
‘Make in India blockbuster’
Commerce and industry minister Piyush Goyal called this achievement a “Make in India blockbuster”.
“India achieved this milestone despite all adversities including Covid-19 pandemic, and Russia-Ukraine war, if this was a movie it would be called a Make in India blockbuster,” he said at an official briefing.
He added that closer interaction with states and districts; engagement with exporters; faster resolution of their issues; actively engaging with different export promotion councils, industry associations and other stakeholders have helped in reaching this milestone.
Earlier in the day, Prime Minister Narendra Modi hailed the country’s success via a tweet and said that this is a key milestone in India’s ‘Aatmanirbhar Bharat’ journey.
India set an ambitious target of $400 Billion of goods exports & achieves this target for the first time ever. I co… https://t.co/Fq6t7H8zGM
— Narendra Modi (@narendramodi) 1648006417000
Exports is one of the key factors driving India’s economic growth. Merchandise exports for FY22 are poised to finish well beyond the target set by the Centre.
The sector was one of the very few to revert quickly to pre-pandemic levels once the government started relaxing Covid-related curbs.
In spite of the devastating second wave of Covid-19 in April-May 2021, exports showed a positive sign. It has remained over the $30 billion-mark since March last year.
In terms of monthly exports, December saw 38.91 per cent year-on-year (y-o-y) rise to $37.81 billion, the highest-ever figure. The trend continued in 2022 as well with exports amounting to $34.6 billion in January and $34.57 billion in February — a jump of 23.4 per cent and 25.1 per cent, respectively.
Interestingly, India’s merchandise exports had never crossed $30 billion-mark, except for once in March 2019.
In fact, merchandise exports for April-February 2021-22 period witnessed a 36.25 per cent jump as compared to a year ago.
The surge in exports during April-February was fuelled by higher shipments of engineering, petroleum and chemical goods.
According to the latest data released by commerce ministry, exports of engineering goods, petroleum and chemicals in February increased by 32 per cent, 88.14 per cent and 25.38 per cent to $9.32 billion, $ 4.64 billion and $2.4 billion, respectively.
Pharmaceutical exports, however, slipped by 1.78 per cent to $1.96 billion in February.
Export of engineering goods saw a sharp jump and increased by 50 per cent as compared to last year. The volume of agricultural products exported in FY22 was highest ever and was driven by commodities like rice (other than basmati), marine products, wheat, spices and sugar.
What led to the surge
One of the major reasons for jump in exports is rise in pent up demand, which had fallen as the Covid pandemic forced nations to remain under strict lockdown, thereby impacting global trade.
Beside, boost in domestic manufacturing due to production-liked incentive (PLI) schemes and implementation of some interim trade pacts have also led to surge in exports.
In its mission to promote locally made products in global market, the Centre implemented a series of steps to promote exports of both goods and services and that includes the introduction of Refund of Duties and Taxes on Exported Products (RoDTEP) and Rebate of State and Central Levies and Taxes (RoSCTL) Schemes, the launch of Common Digital Platform for Certificate of Origin to facilitate trade and increase FTA utilisation by exporters, promoting districts as export hubs by identifying products with export potential in each district and addressing bottlenecks, and promoting ease of doing business.
In a press conference, the government of India highlighted that the $400 billion target was generated through bottom up approach and the trade potential for different countries was assessed based on past trends.
Exports were examined by product and also by state and 200 countries and territories were targeted by the government, they said.
Special emphasis was laid on new and existing markets and products, lost markets, low hanging fruits where the country has strength, faster resolution of exporter’s issues. Besides, MSMEs and startups were used as a vehicle for exports, the government said.
Why exports are important
Exports are one of the fundamental drivers of growth for any economy. It can influence a country’s GDP, exchange rate, level of inflation as well as interest rates.
A robust export data is beneficial as it leads to increase in job opportunities, enhances foreign currency reserves, boosts manufacturing and also increases government’s revenue collection.
It is also a good means by which a country can bring itself out of the recession phase. Exporting to countries with a favourable economic climate helps in increasing the GDP levels as well as helps in reducing unemployment.
Besides, it also plays a key role in strengthening the domestic manufacturing units by scaling up their quality to make India made products compete and stand out against global peers.
The Centre said that achievement of $400 billion target shows India’s spirit to meet seemingly impossible targets. It depicts the country’s resilience, commitment and clearly shows that the world trusts Make in India brands.