India achieves $400-bn export target for FY22 ahead of schedule

Govt is confident of clocking $410 bn exports by March 31, as India has been shipping roughly $1.3 billion a day

India exported goods worth $400 billion ahead of schedule, even as it stares at a disruption in the global economy emanating from the conflict between Russia and Ukraine that began last month.

To be sure, the $400 billion figure was achieved as on March 21, which is 37 per cent higher than the previous financial year, when India exported goods worth $291 billion. The government is confident of clocking exports worth $410 billion by 31 March as India has been exporting goods worth roughly $1.3 billion per day.

During the same time period, imports grew 51 per cent on year to $589 billion, resulting in a trade deficit of $189 billion. The trade deficit was $114 billion in FY21.

“India set an ambitious target of $400 Billion of goods exports & achieved this target for the first time ever. I congratulate our farmers, weavers, MSMEs, manufacturers, exporters for this success. This is a key milestone in our Aatmanirbhar Bharat journey,” Prime Minister Narendra Modi said in a tweet on Wednesday.

Commerce and industry minister Piyush Goyal said that to achieve the target, a detailed strategy was in place, including specific country-wise, product-wise and export promotion council-wise target, monitoring and course correction.

He also said that the export target was achieved despite numerous challenges, including two waves of Covid-19 in India and the recent geopolitical tension in Eastern Europe. However, the Russia-Ukraine conflict will also cause some disruption.

“Our exports to Ukraine and Russia aren't much. However, the ongoing conflict is affecting the global economy with higher inflation, disruption due to container shortage. Those challenges are there before us and may lead to some disruption in trade, which has come along with Covid-19. But we are on top of the issues,” Goyal told reporters.

As far as firming up a payment mechanism to facilitate trade with Russia, amid sanctions imposed by the US and its allies, Goyal said that the concerned departments would respond. It is learnt that the department of financial services and the Reserve Bank of India (RBI) is working towards facilitating a rupee-ruble payment mechanism to ensure that trade between both nations is not disrupted. Talks with relevant stakeholders are underway.

A senior government official said that top officials from the shipping and industry department are also meeting regularly to discuss and sort out the issue of container shortages due to the conflict.

Sector-Wise Growth

Engineering goods, petroleum products and organic and inorganic chemicals were the top three goods exported from India.

“Higher engineering exports, apparel and garment export, etc. indicate that the misconception of India being a major exporter of primary commodities is gradually changing. We are now exporting more and more value added and high end exports and this effort by our technology driven industries should continue. Export of Cotton Yarn/Fabrics/Made-ups, Handloom Products etc, Gems and Jewellery, Other Cereals and Man-Made Yarn/Fabrics./Made-up etc. have registered a growth rate between 50-60 per cent,” an official statement said.

A senior government official said that according to a preliminary analysis done by the commerce department, growth  of several commodities, including rice, cashew, automobile components, buffalo meat, cereals, among others, grew significantly in terms of volume and the value of such exports were not only driven by higher commodity prices globally.

Countries such Australia, Taiwan, Korea Rp, Bangladesh, Poland, Brazil, Indonesia, Belgium, Saudi Arabia, Turkey, Italy, Japan, Canada, US, South Africa, Netherland, Nigeria, Egypt and Mexico achieved more than the export target, as of 21 March.

“Till 21st March 2022, Organic & Inorganic Chemical, Other Cereals,  Petroleum Products, Cotton Yarn/Fabrics/Made-ups, Handloom Products Etc., Mica, Coal and Other Ores, Minerals Including Process, Engineering Goods and  Plastic and Linoleumare the major Commodities which have achieved more than the export target,” the statement said.

Goyal also said that a new foreign trade policy will be delayed by a few months and will be firmed up in line with the changes in trade. Apart from that, India-UAE free trade agreement will come into force in six weeks