The export of merchandise from India reached $400 billion for the first time in history
Exports for the year 2021-22 recorded an annual growth of 37%
Export of Engineering goods and Petroleum products registered a historic growth
As of March 22, 2022, India has exported merchandise worth $400 billion in a financial year for the first time. During 2011-12, exports from India exceeded $300 billion, and it took India more than a decade to reach the milestone of $400 billion. The merchandise exports for 2021-22 exceeded $400 billion against $291 billion during 2020-21, registering a growth of over 37%. Such an increase in exports helps attract foreign and domestic investments in India and provides growth opportunities.
Major Drivers of India's exports
Between April 2021 and February 2022, Engineering goods were the primary export commodity that reached a value of nearly $101 billion and a growth of almost 50% year-over-year. During the same period, Petroleum products were the second largest commodity exported from India, reaching nearly $55 billion in value and registering an annual growth of approximately 148%. Gems and Jewelry was the third-largest export commodity, valued at $35 billion, with annual growth of nearly 58%. The other commodities that contributed to the increase in export are Organic & Inorganic chemicals, Drugs & Pharmaceuticals, Ready-made garments, Yarn/Fabrics/Handloom products, Electronic Goods, Plastic & Linoleum, and Rice. The commodities mentioned above accounted for approximately 80% of the export value from April 2021 - to February 2022.
Growth in Exports
With industrial activity returning to pre-pandemic levels, input materials and machinery demand increased considerably worldwide. The demand from construction, automobile, and manufacturing sectors led to a considerable increase in exporting engineering goods, chemicals, plastic, and metals from India.
The increasing prices of crude oil, the uncertainties related to the COVID-19 pandemic, and the invasion of Ukraine by Russia led to the costs of petroleum and petroleum-related commodities increasing substantially. As a result, countries began to stockpile oil reserves, which increased the demand for oil and petroleum products in the global market, leading to a rise in exports from India.
Countries' relaxation of the Covid-related restrictions reduced logistic challenges and made production and material sourcing easier. Consequently, the pent-up demand led to an increase in exports. Implementing various incentive schemes such as the Refund of Duties and Taxes on Exported Products (RoDTEP) and Rebate of State and Central Taxes and Levies (RoSCTL) helped increase production and exports. The increase in exports also resulted in growth in traditionally employment-intensive and sunrise sectors.
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