India trade volumes shrink; economist sees Greta Effect

India's agriculture exports rise
In rupee terms, the country's agriculture exports rose 22.62% in 2020-21 to Rs 3.05 lakh crore.

The country’s exports of goods declined by 1.7% in January, posting negative growth for the sixth month running. The month saw a trade deficit of $15 billion as imports also dropped by 0.75%, according to government data released on Friday. Mercantile exports in January stood at $26 billion as items such as gems and jewellery and readymade garments continued to shrink. Imports during the period stood at $41 billion as items such as precious metals and minerals fell.

Exports shrank 1.9% in the first 10 months of the financial year up to January, while imports dropped 8.1%. The trade deficit for the period stood at $133.3 billion. Overall trade balance (goods and services) for the period was $64 billion compared with $98 billion in the same period last year.

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The new coronavirus outbreak could have a major impact on India’s trade volumes in February. China is a major factor in the country’s economy and global trade. Bilateral trade with China has grown to $87 billion in 2018-19 from $4.8 billion in 2002-03.

Some economists feel that the world trade is going through a period of change due to the fears of global warming and climate change. People in the advanced economies have begun to cut down on consumption, says Delhi-based economist Murali Kallummal, who calls it ‘Greta Effect’ after teenage environmental activist Greta Thunberg. As these countries account for a large chunk of global consumption, world trade is taking a hit, says Dr Kallummal, who teaches at the Centre for WTO Studies, Indian Institute of Foreign Trade, New Delhi.

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Among the 30 major items, 21 items of exports and 17 imported items posted negative growth. Among exports, ready-made garments, gems and jewellery and engineering goods shrank, while pharmaceuticals, electronics, petroleum and chemicals posted growth. Imports of coal, chemicals, gold, and electronic goods fell, while machinery, machinery and transport equipment posted growth.

According to RBI data, exports in services grew 12% to $20 billion compared with December 2018 while imports also grew by 10.36% to $12.56 billion. Trade balance in services for the month wIndia trade, India exports, India imports, coronavirus, india trade deficitas $7.45 billion, according to an RBI release.