Even as India's merchandise trade performance did not improve despite opening borders, there seems to be some relief. Taking merchandise and services together, overall trade surplus for April to August of FY21 was estimated at $14.20 billion, a rare achievement during this period, in at least a decade. In fact, progressively, this fiscal has witnessed a combined trade surplus since April. There was a deficit of $45.11 billion during April-August 2019. Since 2011/12, only the first five months of FY17 witnessed a narrow deficit of $7.4 billion which otherwise stood at an average of nearly $43 billion.
Overall exports (merchandise and services combined) in April-August 2020 are estimated at $182.13 billion, while imports are expected to be $167.94 billion.
India's net earnings from trade in services rose year-on-year by 11.7 per cent to $7 billion in July 2020, as against a 6.7 per cent fall registered in the year-ago month. Receipts from services exports fell by 10.8 per cent to $17 billion and payments for services imports fell by 21.7 per cent to $10 billion in July. As per the ministry of commerce release, the estimated value of services export for August is $17.23 billion while the value of service import is projected at $10.31 billion. As a result, the trade balance is pegged at $6.92 billion during the month. This figure for the first five months of FY21 is estimated at $34.91 billion. The estimates will be revised based on RBI's subsequent release.
On the other hand, both merchandise imports and exports have dropped to a five-year low in the current fiscal. The inbound trade fell 26 per cent while the outbound trade declined nearly 13 per cent, year-on-year, in August. Eventually, trade deficit, at $ 6.7 billion, widened to a-four month high. On a cumulative basis, imports were lower by 43.8 per cent and exports fell 27 per cent from the comparable period last year. Country's imports and exports are expected to see a sharp contraction in fiscal 2021.
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