Indian exports cross $400 billion for the first time in FY22
The last time that India had met its merchandise export target was in 2014. For FY22, Piyush Goyal had set an aggressive target of $400 billion. That target has been just about achieved and India could close FY22 with merchandise exports of $415 billion.
The export thrust came from a spike in in oil prices, surge in commodity prices, resurgent agri-sector and a higher share of manufactured goods. The announcement was made by the PM himself.
The prime minister has specifically congratulated specific stakeholders like farmers, weavers, MSMEs, manufacturers and exporters for this achievement. In India, the MSMEs still account for more than one-fourth of all exports.
This translates into an average of $33 billion of exports on a monthly basis and a little over $1 billion of exports every day. India’s total merchandise trade is expected to cross $1 trillion in FY22.
Cumulative exports for the 11-month period from Ap-21 to Feb-22 had grown by 45.8% over the comparable pre-pandemic period. That means; a big chunk of the GDP revival post pandemic has come due to the growth in exports.
All the major export sectors like oil products, agri products, gems & jewellery and textiles have done extremely well. Even APIs and specialty chemicals made a meaningful contribution.
Highlights of the export thrust in FY22
Here is what triggered this record growth in merchandise exports in FY22.
1) Commodity exports played a big role in achieving the $400 billion target. For India, processed petroleum accounts for 15% of the total export basket and they gained substantially from the surge in Brent Crude prices.
Export of processed petroleum nearly doubled in FY22 with the comparable period in the previous year.
2) Gems and jewellery also played a pivotal role in the export thrust. It is the second largest export. India reported $32 billion of gems & jewellery in FY22 with Indian exports of gems and jewellery accounting for 3.5% of world exports.
Indian government has set an ambitious target to increase this share of global exports from 3.5% to 7%.
3) India has done a good job in industrial input exports too. In the aftermath of COVID-19, a rise in the prices of key input materials, such as steel, chemicals and plastics helped India's exports recover. India earned $19 billion from steel exports alone in FY22.
There has been a surge in exports of primary steel and value-added steel.
4) The other export item that has shown strong growth is organic chemicals which has also touched $18 billion in FY22. In addition, exports of plastic and rubber accounted for another $11 billion.
Here, India not only filled up the gap in specialty chemicals created by China, but also made the best of supply chain constraints globally.
5) Finally, let us look at another segment that grew exports at 24% i.e. agricultural sector. Exports were boosted by better access to the US, EU and the Middle East markets.
The main item of export remained processed foods. In the current fiscal, the export of processed and unprocessed farm produce has touched $38.6 billion.
The good news is also that the export basket has been gradually diversified. That would ensure sustained growth in exports in the coming years.
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