India’s containerized trade with the world has enjoyed a spirited uptick in the first quarter of 2018, as it beat the country’s past performance in export-import growth over eight quarters. Imports witnessed a material increase of 16%, with exports also growing at a healthy pace of 7%. Together, they led India’s trade to a strong start this 2018.
“These numbers become more relevant when viewed through a global lens. They are significantly higher than estimated global containerized demand growth of 3-4% ,” explains Steve Felder, Maersk Line Managing Director for India, Sri Lanka, Bangladesh, Nepal, Bhutan and Maldives.
IMPORTS
The key contributor to import growth during this period was dry cargo (commodities that aren’t liquid or perishable), which jumped by 22%. This contrasts with the corresponding period last year when the segment grew only 2%. Recyclables, namely paper and metal, were the two dry cargo commodities that led this growth and registered strong 61% and 55% increases respectively. A large portion of these commodities came to India from North America and Europe, and helped North and West India imports rise by 36% and 13% respectively.
“Recyclable commodity imports were severely impacted by de-monetization. With the rebound we’ve seen in this category now, it would be safe to assume that the effects are finally wearing off and domestic consumption is on the rise,” says Felder. “Additionally, China’s recent decision to increase restrictions on waste paper imports benefited India, which is a major importer of this commodity for local recycled paper manufacturing. Together, these key developments have augured well for India’s import growth.”
EXPORTS
On the export side, rocketing demand for Indian made vehicles in Turkey, and Indian fruit and nuts in UK and UAE, pushed growth to a healthy 7%.
“The first quarter has been a fairly constructive period for export growth as well. As the effect of policy shifts faded and the inflow of GST refunds began, it created surplus capital in the hands of local manufacturers. The market was further buoyed by a weaker rupee, which in turn increased India’s exports to the world,” adds Felder.
EAST INDIA WITNESSES HIGHEST EXPORT DECLINE
A comparison of the export performance of India’s four regions shows that East India saw the highest decline in exports this year at -6% growth. This was the result of a significant fall in the metal segment (mainly aluminium, ferro and steel) and rice exports originating from the region. These are estimated to have dropped by 12% and 20% respectively. In contrast with Q1 last year, East India led the country’s overall export growth at 29%.
“Rice exports overall have been weak this year, while the metals segment, mainly ferro and pipes, wasn’t competitive in global markets, which led to this stark decline,” explains Felder.
The region’s metal exports fell across all its key destination markets, while the highest drop in rice exports was witnessed in the Mediterranean and West Africa markets.
On the other hand, imports of pulses into East India saw an upward climb, particularly chick peas and yellow peas fromCanada and Turkey.
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