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Indias merchandise exports cross $400 billion: SBI

Indias merchandise exports

Indias merchandise exports cross $400 bn, but significant challenges persist

In FY22, Indias merchandise exports reached a new high of $420 billion. India required a decade to add another $100 billion (the $300 billion level was reached in FY12), compared to only five years to reach $200 billion from $100 billion (FY06 to FY11). 
 
According to SBI, “the creation of new trade corridors through FTAs/ECTA/CEPA” and the government’s Production-Linked Incentive, or PLI plan, were among the reasons that contributed to this rise. 
 
“India’s exports of goods and services (as a percentage of GDP), which were just 3.7 percent in 1970 and 6.1 percent in 1980, peaked in 2013 (25.4 percent) and then declined until 2020 (18.7%), matching the worldwide pattern. 
 
It went on to say that the top 10 countries’ percentage of India’s export basket has decreased over time, while the share of others has climbed, reflecting a diversification of export destinations. 
 
“During Apr-Feb’ FY22, our top 15 exports accounted for more than 72 percent of our entire export kitty,” according to the study.

Indias merchandise exports

According to the report’s estimates, “55 percent of the increase in exports in FY22 is attributed to quantity effect, and the remaining 45 percent is attributed to price effect, indicating that the growth in exports in FY22 could be sustained if we continue to follow right policies,” contrary to popular belief. 
 
Only 31% of the rise in petroleum crude and product exports in FY22 can be attributable to higher quantity, while the remaining 69 percent is due to higher prices, according to the report’s findings. 
 
“In the case of imports, 26% of the influence is quantity, and 74% is price, which is obvious given the elevated level of global commodity/food prices,” it stated. 
 
The report noted that notwithstanding COVID-19, the country’s agricultural exports increased dramatically and crossed the $50 billion mark in FY22. The wide disparity between the Minimum Support Price (MSP) and world prices, on the other hand, is expected to encourage wheat exports from India, which, according to the report, must be “judiciously balanced with domestic wheat supplies.” Goods and Service Exports ( percent of GDP) 
 
According to the paper, India’s exports of goods and services (percentage of GDP), which were 3.7 percent in 1970 and 6.1 percent in 1980, peaked in 2013 (25.4 percent) and then decelerated steadily until 2020 (18.7%), matching the global pattern. 
 
The export share of GDP has already surpassed 20.8 percent in FY22.

Agricultural exports

Despite COVID-19, the country’s agricultural exports expanded considerably, surpassing $50 billion in FY22, according to the report. The large gap between India’s Minimum Support Price (MSP) and world prices, on the other hand, is projected to stimulate wheat exports, which must be “judiciously managed with domestic wheat supplies,” according to the report. Exports of both goods and services ( percent of GDP) 
 
According to the report, India’s exports of goods and services (as a proportion of GDP), which were 3.7 percent in 1970 and 6.1 percent in 1980, peaked in 2013 (25.4 percent) and then decelerated progressively until 2020 (18.7%), following the worldwide trend. 
 
In FY22, the export percentage of GDP already topped 20.8 percent. 

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