India taking steps for economy growth
India’s exports in April jumped took a high jump from $10.17 billion, according to commerce ministry’s preliminary data released on Sunday.
Imports too rose to $45.45 billion last month as against $17.09 billion in April 2020.
“India is thus a net importer in April with a trade deficit of $15.24 billion, which increased by 120.34 per cent over the trade deficit of $6.92 billion in April 2020,” the ministry said in a statement.
The three-fold jump in exports came amid signs that India’s economy may shrink in the current quarter ending in June as Covid-19 cases surged. Sonal Varma, India chief economist at Nomura, said the country is “clearly going to see a sequential growth hit” in its first quarter. India’s fiscal year begins in April and ends in March the following year. She predicts that gross domestic product will shrink around 1.5 per cent in the current quarter, which ends in June. Varma added there is “downside risk” to this estimate.
However, despite the two-fold surge in trade deficit in April, foreign exchange reserves increased by $1.701 billion to $584.107 billion in the week ended April 23 2021, bolstered by accumulated current-account surplus, rising inflows into the local stock market and foreign direct investment. Currently reserves are enough to cover roughly 18 months of imports, data from the Reserve Bank of India showed.