The massive improvement in India’s exports in July is led by a 78 per cent spike in shipments to China and other Asian nations that had successfully contained the pandemic, constituting 16 per cent of the overall exports basket, according to a CRISIL report, which said the pace of exports decline slowed to 10.2 per cent in July from 60.2 per cent in April.
Since then the pace of contraction has been steadily declining as the economy began to open up. Contraction in shipments improved to 50 per cent in May and 30 per cent in June.The massive improvement in India's exports in July is led by a 78 per cent spike in shipments to China and other Asian nations that had successfully contained the pandemic, constituting 16 per cent of the overall exports basket, according to a CRISIL report, which said the pace of exports decline slowed to 10.2 per cent in July from 60.2 per cent in April.#
"While July shipments to China jumped a full 78 per cent, the same to Malaysia jumped 76 per cent, Vietnam (43 per cent) and Singapore (37 per cent). Most of these economies had flattened the pandemic caseload curve in this period," said CRISIL, an S&P Global company.
"Exports growth in the pandemic-dominated world is inversely related to the rise in the pandemic caseloads in its export destinations. Stated differently, exports are flowing back to economies that have checked the affliction. That explains why, exports to certain economies are looking up, while overall exports per se are still declining, though at a slower pace," according to CRISIL economists Dharmakirti Joshi and Pankhuri Tandon.
In contrast, exports declined to Western nations like the United States, Brazil and the United Kingdom, which saw a much higher caseload and were struggling to control it, they argued.
While exports to the UAE declined by 53.2 per cent, the same to the United Kingdom contracted by 38.8 per cent, to the United States by 11.2 per cent and to Brazil by 6.3 per cent.
This means that export prospects for this fiscal will pivot on the trajectory of the pandemic across countries. It will rise to those countries which have controlled their caseload and restarted activity, CRISIL said.
Significantly, inward shipments from China have been contracting massively since the beginning of the year reaching minus 60 per cent in June, bringing down trade deficit with the world's largest exporting nation to around $10 billion in June from close to $50 billion in January.
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