According to a report by global integrated logistics company Maersk, the trade growth during April-June 2018 stood at a healthy nine per cent growth, almost three times higher than the global growth average of 2-3 per cent.
“India‘s containerised trade growth slowed to one per cent in Q2 2019, due to a cocktail of international factors such as slowing trade growth, and growing trade tensions coupled with domestic factors like rural consumer distress, tightening liquidity and a slow-down in key manufacturing sectors,” the report said.
Both imports and exports were growing at a healthy rate during the same period last year at eight per cent and nine per cent, respectively. However, in Q2 2019, imports have grown at a meager two per cent, while exports have remained flat.
“The combination of these factors impacted the country’s economic activity, slowing overall import-export growth,” it said.
As per the report, west India delivered the highest growth with imports growing at four per cent and exports at 11 per cent.
North India, on the other hand, delivered one per cent growth in imports yet a steep decline of nine per cent in exports. South India, on the other hand, registered one per cent import growth and two per cent export growth, while the eastern part recorded two per cent growth in imports and contracted by one per cent in terms of exports.
India’s exports to China declined by 20 per cent, led by a reduction in demand for India-made textiles and apparel, which were large export commodities in the corresponding period last year. While, imports from China contracted more, by 22 per cent.
On the other hand, the increasing economic cooperation between India and Saudi Arabia led the latter to emerge as one of Indias strongest export partners in Q2 2019, growing by 74 per cent, with vegetables and tiles, stone and glass exports from India leading this growth, it said.
India’s overall trade with North America grew 14 per cent, and with Europe a growth of 10 per cent in Q2 2019.
Containerised trade with the Mediterranean countries was flat, primarily due to a two per cent contraction in exports.
While India’s export growth with the world stagnated, export growth to North America doubled from the corresponding period last year to 15 per cent growth in Q2 2019.
This was largely led by North India, which delivered an increase of 18 per cent this year as opposed to one per cent last year. West and South India also contributed to the overall export growth, while growth from east India shrunk.
“The overall deceleration of trade growth reflects a broad-based slowdown across key economic sectors. Amidst increasing global volatility, a slower local economy and the USA’s withdrawal of preferential access for certain Indian products, India’s import-export trade is expected to continue to face headwinds in the coming months,” Maersk South Asia Managing Director Steve Felder said.
He further said the commerce ministry’s recently proposed export promotion scheme, supported with a production-based support scheme, coupled with a weaker rupee, is expected to boost ‘Make in India’ and benefit multiple industries.