Surge in India’s exports to China, some Asian countries
By Atul Ranjan
NEW DELHI, NNA - India's exports to countries that have controlled the spread of the novel coronavirus successfully rose sharply in the middle of the year.
According to a report by credit rating agency Crisil Ltd., the month of June saw significant jumps in exports to China and other Asian economies such as Malaysia, Vietnam and Singapore.
The highest growth of 78 percent is China, where the pandemic first began at the end of December 2019. Malaysia followed closely with 76 percent while exports to Vietnam grew by 43 percent. Shipments rose by 37 percent to Singapore and 15.5 percent to South Korea
The year-on-year comparisons placed Japan in the sixth spot with a growth of 4.5 percent. Collectively, they add up to 16 percent of total exports.
“Most of these economies had flattened the COVID-19 caseload curve in this period,” Crisil said.
The Crisil report noted that India’s exports to China had shown a double-digit growth since May. China was also the first to reopen its economy after imposing extreme measures for a few months to fight the deadly outbreak.
However, imports from China have continued to decline, owing to weaker domestic demand and import restrictions.
In contrast, exports to western economies such as the United States, Brazil. Germany and Britain contracted by between 6 percent and 33 percent during the same period.
The United States and Brazil, which have the world's biggest outbreaks, are still furiously battling the pandemic that has killed 800,000 people around the globe.
On the whole, India’s exports and imports have declined consistently since March. This is due largely to pandemic lockdowns which disrupted business activity and global trade besides the already weak domestic demand.
But signs of recovery have emerged after the pace of declining exports slowed down significantly in the last two months. The deep slump of minus 60.2 percent recorded in April has become less severe in July after narrowing down to minus 10.2 percent.
Crisil expects India's exports to increase for destinations where the health crisis has been tackled well and business activity has restarted.
Its report stated, “Export prospects for this fiscal will pivot on the trajectory of the pandemic across countries. It will rise to countries that have controlled their caseload and restarted activity.”
A unit of Standard & Poor’s Financial Services LLC, Crisil warned that exports to some economies might face headwinds as the peak of their outbreak has remained uncertain. Some countries are still grappling with the crisis and threats of a second wave while a proven vaccine is not available yet.
“So there’s no telling if this pickup in exports will last or not – but we could read the cues from closely watching the domestic and global spread of the pandemic in coming months,” Crisil concluded.