India Witnessed Exceptionally Strong Exports Of Goods And Services in 2021-22: Economic Survey
New Delhi, Jan 31 : India witnessed exceptionally strong exports of both goods and services so far in 2021-22, while imports also recovered strongly with recovery in domestic demand as well as higher international commodity prices, the Economic Survey 2021-22 said on Monday. The Survey, tabled by Finance Minister Nirmala Sitharaman in Parliament, said merchandise exports have been above US$ 30 billion for eight consecutive months in 2021-22, despite a rise in trade costs arising from global supply constraints such as fewer operational shipping vessels, exogenous events such as blockage of the Suez Canal for some time, and the COVID-19 outbreak in the port city of China etc. Concurrently, the net services exports have also risen sharply, driven by professional and management consulting services, audio visual and related services, freight transport services, telecommunications, computer and information services.
From a demand perspective, India’s total exports are expected to grow by 16.5 per cent in 2021-22 surpassing pre-pandemic levels. Imports are also recovered strongly with revival of domestic demand and continuous rise in the price of imported crude and metals. Imports are expected to grow by 29.4 per cent in 2021-22 surpassing corresponding pre-pandemic levels. Resultantly, India’s net exports have turned negative in the first half of 2021-22, compared to a surplus in the corresponding period of 2020-21 with current account recording a modest deficit of 0.2 per cent of GDP in the first half.
However, robust capital flows in the form of continued inflow of foreign investment were sufficient to finance the modest current account deficit. Elevated global commodity prices, revival in real economic activity driving higher domestic demand and growing uncertainty surrounding capital inflows may widen current account deficit further during the second half of the year. However, it is expected to be within manageable limits, it said.
