India exported $27.65 billion worth of goods in February, 2.91 percent more than the same month in 2019, indicating the country's trade resilience in times of novel coronavirus (COVID-19) linked global supply chain disruptions and demand plunge.
Sixteen out of the 30 major product groups including petroleum, engineering goods, organic and inorganic chemicals, drugs and pharmaceuticals, electronic goods, handicrafts and marine products were in positive territory in February.
Imports were also 2.48 per cent higher at $37.50 billion during the month as compared to $36.59 billion in February 2019. As a result, India's trade deficit sharply narrowed to $9.85 billion February 2020 as against $9.72 billion registered in February 2019.
The monthly trade data released by the Commerce Ministry on Friday showed that all other major sectors of exports including almost all labour-intensive sector of exports are still in negative territory.
"The modest growth, in the wake of novel coronavirus, which not only pulled down the global sentiments but also affected the supply chain both internationally and domestically, is encouraging. However, the impact of pandemic will be more visible in exports figure of March onwards," Sharad Kumar Saraf, president, Federation of Indian Exports Organisations said.
Earlier during the day, the Union Cabinet approved the long-awaited Remission of Duties or Taxes on Export Product (RoDTEP) scheme to replace the existing Merchandise Exports from India Scheme (MEIS). This change is meant to help reduce the cost of exports from the country.
"RoDTEP will go a long way in enhancing the growth prospects not only in the short-term but will also give it a much-needed boost in the medium and long-term. However, it should be notified with immediate effect for all the products with lead time of at least 3 months now so that exporters may factor the same in finalising new orders and making their transition to the new scheme smooth while continuing with MEIS in the interim period," Saraf said.
Ravi Sehgal, chairman, Engineering Exports Promotion Council said that irrespective of the positive growth in exports, the outlook looks grim going forward. "Global trade is in a state of logjam with the entire supply chain getting disrupted. Under such a tough economic environment, it is imperative for immediate relief from the government to keep the vital exports, particularly in the job-oriented SMEs going," Sehgal said.
Rating agency ICRA said the merchandise trade deficit for February 2020 was in line with their expectations. "Nevertheless, the merchandise trade deficit is expected to narrow sharply in March 2020, following the plunge in crude oil prices," Aditi Nayar, Principal Economist, ICRA, noted.