The Ultimate Guide to Know The Impact On India's Import Export amid Covid'19

Covid-19 Impact on India's economy,

            The novel Coronavirus created a big impact in India's economy. It affected people as well as the import and export of India. It is still showing a great impact on the lives and economy of people all over the world. As an Indian citizen it is important to know what is happening to our Indian economy. This article will give you a hint about the India’s economical position, exports, imports and trade balance during the COVID-19 period. 

INDIA’S POSITION:

The report from IMF says that the global GDP will shrink to -3.0% during 2020, while it was projected to remain at 3.3% before the coronavirus outbreak. 

              From the data mentioned in the IMF report most countries, in the advanced economy group, are forecast to contract this year, including the Germany (-7.0%), France (-7.2%), the United Kingdom (-6.5%), Italy (-9.1%), United States (-5.9%), Japan (-5.2%), and Spain (-8.0%). Notably, all these countries have been badly affected by the coronavirus outbreak. 

         The World Economic Report says that if the coronavirus pandemic ends in 2020 then the economies of India and other countries will return on track once again. There is good news and a bad news for Indian economy amid the coronavirus pandemic. 

            The good news is that despite the massive setback due to coronavirus lockdown, India is one among the top countries in the world whose economy is expected to grow more than the world's average. But the bad news is that the Indian economy is projected to register only 1.9% growth in 2020 fiscal year, as per the latest report of International Monetary Fund (IMF).

INDIA’S EXPORTS:

March 2020

India went into lockdown on 25th March, 2020, restricting 1.3 Billion people inside home.

•  Exports of India was affected during this period. Tea is the least affected with decline of over 33% in march 2020 when compared to previous year
•  Engineering goods, meat and poultry products along with oil meals took the steepest hit ranging   between 42 to 70%
• Cumulative value of exports for the period of April – March 2019-20 was USD 314.31 Billion as against USD 330.08 Billion during period April-March 2018-19 registering negative growth of 4.78%in Dollar terms.

      April – May 2020

Exports in May2020 were USD19.05billion, as compared to USD29.99billion in May 2019, exhibiting a negative growth of (-)36.47per cent 

• Except the commodities like Iron ore, Drugs & pharmaceuticals, Spices and Rice which registered a growth of 103.04%, 17.32%,10.55% and 7.64% respectively, all other commodity groups have registered negative growth in May 2020 when compared to May 2019 
• Major commodity groups which have recorded negative growth more than 50% are Leather and leather products, Handcrafts excluding Carpet, Gems and Jewellery, Petroleum products, RMG of all Textiles, Jute products, Yarn fabrics, Meat, diary and poultry products and many commodities experience below 50% of decline in exports 
• Cumulative value of exports for the period of April – May 2020-21 was USD 29.41 Billion as against USD 56.07 Billion during period April-May 2019-20 registering negative growth of 47.54% in Dollar terms

INDIA’S IMPORTS:
March 2020

Rise in import was witnessed only in transport equipment, which registered a growth of 11.94% over March 2019 

• Oil imports in April-March 2019-20 were USD 129.43 Billion which is 8.15% lower in Dollar and 6.99% in Rupee terms compared to USD 140.92 Billion over 2018-19
• Non-oil imports of April-March 19-20 were USD 309.53 Billion against USD 340.25 Billion which is negative growth of over 9.03% 
• Items which shows negative growth in imports are gold, silver, electronic goods, machine tools, iron and steel, coal and petroleum and chemicals.

April – May 2020

        Imports in May2020 were USD22.20billion, which was 51.05per cent lower in Dollar terms and 46.92per cent lower in Rupee terms over imports of USD45.35billion in May2019. 

• Cumulative value of imports for the period April-May 2020-21 was USD39.32 billion, as against USD86.75billion during the period April-May 2019-20, registering a negative growth of (-)54.67per cent in Dollar terms. 
•  Non-oil imports inMay2020 were estimated at USD18.71 billion which was 43.13per cent lower in Dollar terms, compared to USD32.91billion in May2019. Non-oil imports in April-May 2020-21 were USD31.17billion which was 50.46per cent lower in Dollar terms, compared to USD62.93billion in April-May2019-20 

 Oil imports inMay2020 were USD3.49 billion, which was 71.98% lower in Dollar terms, compared to USD12.44billion in May2019. Oil imports in April-May 2020-21 were USD8.15 billion which was 65.79 per cent lower in Dollar terms compared to USD23.82billion, over the same period last year.

TRADE BALANCE:

MERCHANDISE: The trade deficit for March 2020 was estimated at USD 9.76 Billion as against the deficit of USD 11.00 Billion in March 2019 

SERVICES: As per RBI’s press release dated 15 Apr 2020, the trade balance services for Feb 2020 is estimated at USD 6.66 Billion 

Taking both together overall trade deficit for April – March 2019-20 is estimated at USD 70.16 Billion as compared to USD 70.16 Billion as compared to USD 103.32 Billion in April- March 2018-19.

MERCHANDISE: The deficit for May2020 was estimated at USD3.15billion as against the deficit of USD15.36billion inMay2019. 

SERVICES: As per RBI’s hand-out dated 15th June 2020, the trade balance of trade in Services (i.e. Net Services export) for April 2020 is estimated at USD7.15 billion. 

OVERALL TRADE BALANCE: Taking merchandise and services together, overall trade surplus for April-May 2020-21* is estimated at USD4.37 billion as compared to the deficit of USD17.84 billion in April-May 2019-20. 

Even though COVID 19 has reduced India’s exports and imports, the trade deficit has been at it lowest i.e. trade deficit fell 79.5% to USD 3.15 Billion in May 2020 from USD 15.36 billion in May 2019.

What is your thoughts on Indian economy during COVID-19? Write it in the comment section!