China replaced the UAE as the second largest export destination for India in fiscal 2021, with outbound shipments to the neighbouring country rising 27.53% to $21.18 billion in the pandemic year.
The US remained the country’s top export partner, according to government data, but shipments declined 2.78% to $51.63 billion in a year when India’s merchandise trade — both exports and imports — fell amid global lockdowns and disruption to logistics due to the pandemic.
Iron ore, organic chemicals and petroleum were the top exports to China in the year ended March 31. Exports to China increased last fiscal year despite tensions between New Delhi and Beijing over border skirmishes. India’s imports from China declined marginally, but its share of total imports increased. Hong Kong, Bangladesh and Singapore were the other top markets for India last fiscal year.
China’s share in India’s export basket rose to 7.29% in FY21 from 5.3% the year before. Farm products followed by pharmaceuticals drove exports last fiscal year. “There was a sharp spike in exports of rice, wheat, maize, other cereals, processed food products, fruits and vegetables in 2020-21 with new export markets being added. We are seeing a pickup in organic and valueadded products such as processed vegetables and alcoholic beverages, led by high demand in the Middle East, Far East, the US and the UK,” said M Angamuthu, chairman of the Agricultural and Processed Food Products Export Development Authority (Apeda).
India aims to post $400 billion of merchandise exports in the ongoing FY22. Exports in FY21 shrank 7.3% to $290.6 billion while imports fell 18% to $389.2 billion, leading to a trade deficit of $98.6 billion.
“In line with the contraction in global trade in 2020, India’s exports also witnessed a similar fate but this was no mean feat considering national and local lockdowns, and disruption in logistics that affected manufacturing and trade,” said Ajay Sahai, director-general of the Federation of Indian Export Organisations.
Meanwhile, the growth in India’s pharmaceutical exports at 10% in 2016-20 has outpaced the 8% global growth of imports. As per the World Trade Organization, the volume of world merchandise trade is expected to increase 8% in calendar year 2021 after having fallen 5.3% in 2020.
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