India’s Exports And Imports Hit All-Time Highs In December

India's merchandise exports jumped to a record high in December, so did imports, causing the trade deficit to remain elevated even as it narrowed over the preceding month.

The gap between exports and imports stood at $21.99 billion in December compared with $22.91 billion in November, a government statement said.

• Merchandise imports were at $59.27 billion in December, up 38.1% year-on-year and 12% over the previous month.

• Merchandise exports were at $37.29 billion, up 37% year-on-year and 24.1% over November.

For the October-December quarter, the cumulative trade deficit is now at $64.4 billion, significantly higher than $44.1 billion in July-September quarter when the current account deficit stood at 1.3% of GDP, said Nomura in a report.

Traditionally, a current account deficit within 2% of GDP is seen as sustainable over the medium term. For the full financial year, Nomura estimates the current account deficit to average 1.6% of GDP.

India's exports and imports posted all-time highs on level terms as high commodity prices and robust demand kept trade activity elevated, said Rahul Bajoria, chief economist at Barclays. Still, the deficit remains large, and risks of sticky deficits cannot be discounted, he said.

Madhavi Arora, lead economist at Emkay, said for year-to-date FY22, the trade deficit is high at $140 billion, higher than the pre-pandemic level of $126 billion for the same period in FY20. Assuming oil at current levels, the trade deficit, according to her, could moderate but hover close to highs of over $18 billion amid domestic demand and dragging global supply bottlenecks.

• Non-petroleum exports in December 2021 were at $31.67 billion, up 27.31% on an annual basis.

• Non-petroleum imports rose to $43.37 billion in December, an increase of 30.2% year-on-year.

Key Export Items

Most major exports rose in December after declining the previous month.

• Engineering goods exports stood at $9.7 billion, up 37.3% year-on-year.

• Petroleum product exports were at $5.6 billion, which is 140.2% higher than a year earlier.

• Gems and jewellery exports were at $3 billion, up 15.8% on an annual basis.

• Drugs and pharmaceuticals exports were at $2.3 billion, a rise of 3.8% on an annual basis.

Key Import Items

• Petroleum, crude and product imports were up 65.2% over a year earlier to $15.9 billion in December.

• Electronic goods imports were at $6.5 billion, up 29.7% over a year earlier.

• Gold imports stood at $4.7 billion, up 4.6% than a year ago.

• Machinery, electrical and nonelectrical imports were at $3.9 billion, an increase of 23.2% over December 2020.

• Organic and inorganic chemicals imports were at $3.2 billion, 71.5% higher than a year ago.

• Imports of coal, coke and briquettes were 72.1% higher year-on-year at $2.8 billion.