Services exports rose by 6.4% in May
Wadhawan says exports recovery ‘comprehensive’; asserts volumes rather than prices driving growth
India’s services exports grew by 6.44% in May to $17.85 billion, while services imports grew just 0.3% to $10 billion, as per initial estimates, Commerce Secretary Anup Wadhawan said on Thursday.
“There is a comprehensive recovery in India’s exports with May’s numbers building on the performance in April,” Mr. Wadhawan said, citing the 67% rise in merchandise exports in May, which was also 8% higher than the pre-pandemic month of May 2019.
Services trade recorded a 15.4% higher surplus year-on-year last month, so the trade surplus from the sector had gone up, the Commerce Secretary said. Preliminary estimates for May’s merchandise trade were released on Wednesday, while the data for services trade is an estimation, which may undergo revision with subsequent data releases from the Reserve Bank of India.
While petroleum and gems and jewellery exports had been doing badly earlier, Mr. Wadhawan said that they had contributed significantly to May’s numbers, suggesting that ‘this is a turning point’ for the two.
Dismissing suggestions that imports from China were consistently rising despite India’s AtmaNirbhar Bharat programme, Mr. Wadhawan asserted that the view was not an accurate conclusion and that the country’s trade with China was ‘more balanced today’.
‘Wait for PLI’s effects’
“Many of the measures taken are medium term so their effects will start showing. The production-linked schemes are materialising into investments on the ground in a very expedited framework, and the outcomes will be visible in the medium term to long term, more in the early medium term. In sectors like electronics and mobile phones, this will be visible by next year itself,” the Commerce Secretary added.
Mr. Wadhawan asserted that rising commodity prices had not influenced the higher export figures.
“We will give you that analysis, but the fact that the world is facing a recession, I don’t think the price aspect would be very dominant. The dominant effect would be from volume growth. The predominant impact is from volume growth, not price growth in today’s recessionary times… in some areas at the margins, the price would have helped,” he contended.
The long-awaited notification of the Remission of Duties and Taxes on Export Products (RoDTEP) scheme would be done ‘very early’, Mr. Wadhawan reiterated again. “There is no doubt on the fact that the RoDTEP will be introduced from January 1 this year and it’s part of the government’s policy. It’s a new scheme… needless to say, it has some implementation issues. We have been addressing them and very soon, we will be able to (implement it),” he said.
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