Export-Import Bank of India (India Exim Bank) forecasts India’s total merchandise exports to amount to US$ 87.2 bn, growing at 70.1% compared to US$ 51.3 bn in the last quarter. Non-oil exports increased to amount US$ 78.26 bn, growing at 68.5%, during the first quarter of 2021-22, as compared to US$ 46.4 bn for the corresponding quarter of the previous year. This rise is mainly due to the hike in global oil prices, and growth in advanced economies.
It further added that despite of the second wave of infections of the COVID-19 pandemic witnessed in India during end April-May 2021, could have subdued exports during the quarter to some extent; exports from India have nevertheless been relatively resilient.
In April, Data released by the commerce ministry showed that merchandise exports grew 60.3% to a record $34.45 billion and imports rose 53.7% to $48.38 billion leading to a trade deficit of $13.9 billion. However it has further increased more as compared to the predictions in April. Its mainly because of vaccination has increased worldwide and other countries have started opening their borders for trade. Also the last quarter trade business was mainly impacted due the Suez channel was blocked by the vessel for a week. Trade business of export and import by India happen through Suez channel is around worth $200 billion.
The high growth came over the low base of March 2020, when exports collapsed 35% and imports plummeted 29% with countries imposing strict curbs to stem the spread of covid-19. However, in terms of value, both exports and imports improved significantly from February, at $28 billion and $41 billion, respectively.
In March, non-petroleum and non-jewellery exports grew 61.7% led by engineering goods (67.7%), drugs and pharmaceuticals (45.4%). Imports were led by a spurt in domestic demand for gold (591.7%) followed by electronic goods (77%) and machinery (60%). Overall, exports in FY21 contracted by 7.3% to $290.6 billion, while imports fell 18% to $389.2 billion, leading to a trade deficit of $98.6 billion.
Exim Bank had developed an in-house model to generate an Export Leading Index (ELI) for India to track and forecast the movement in India’s exports on a quarterly basis. The next growth forecast for India’s exports for the quarter July-September 2021 mostly will be released during the first week of September 2021.
Export merchandising is a method of offering retail goods for sale in a foreign consumer market. Many large companies across the country maintain entire divisions devoted to finding ways to better enter foreign retail markets through export merchandising to increase profit and sustain growth. Basically, goods will be sent by the sellers from their country to the country of buyer and as they receive the goods at the mentioned location, once the delivery is taken by the buyer, all the further process will be taken by them. This will save a lot of time and cost for the seller to start a new setup in many other countries.
In a global economy, export merchandising is becoming very important if they want to expand worldwide. Companies are also targeting customers worldwide with the help of export merchandise. Establishing a physical retail presence worldwide is very difficult and expensive for small businessmen. But with the help of the internet has helped these merchandise to set up a global network for their business and export their product to any part of the world.
Especially after the prediction that GDP and trade will go down after the second wave, the news of growth in export will give more hope to Indian’s exporters and export merchandiser.