As the exuberance around the recent rankings conferred on India by the World Bank and Moody’s just about begins to alleviate, the country gets yet another reason to celebrate, with its global containerized import-export recording its highest growth in the past year, at a strong 10% in Q3 of 2017.
Mirroring this overall increase, imports and exports have also clocked growth at the same rate, outperforming industry expectations.
With a lot to cheer about already, India’s GDP too has taken an upward turn once again, indicating that the impact of major reforms such as demonetization and GST are finally stabilizing, and the business environment is expected to improve further once concerns around GST refunds are addressed.
These upticks are in turn expected to once more push up consumer spending, further propelling India’s trade prospects in the months to come; more so against the backdrop of recent announcements by the government on awarding the infrastructure status to India’s logistics Industry and setting up a special cell to promote India’s exports to the world.
According to Steve Felder, Managing Director, Maersk Line – India, Sri Lanka, Bangladesh, Nepal, Bhutan and Maldives, “the growth we have seen this quarter reflects the resilience of India’s global trade environment. Not only is India repeatedly outpacing the global growth average, but it is also one of the strongest global import-export partners amongst the BRICS nations.”
He adds, “As local businesses supported by bold government reforms continue to benefit from the improving atmosphere, we expect India’s growth to only further boost its position in global trade and competitiveness. To that end, we in Maersk Line are fully equipped to support the trajectory of India’s trade, with end-to-end services to offer customers value at every step in the logistics value chain, right from financing cargo to secure store-door delivery in almost any corner of the world. We are committed to continuing to invest in further enhancing our capabilities in this area.”
A close look at data related to India’s import-export trade with close to 200 countries across the globe reveals some interesting insights.
In Q3 2017, exports to Mediterranean led India’s overall exports growth, registering a 14% increase; whereas exports to North America grew at 8%; indicating India’s strengthening trade ties with these regions.
Amongst the Mediterranean countries, Turkey emerged as India’s largest export trading partner in terms of overall volumes, due to growing demand for textiles from the northern states of India, as well as vehicles and metal from the western region of the country.
Exports to Algeria, on the other hand, showed the highest jump at 28% growth in Q3 2017, up from 12% growth in the corresponding period of last year.
Additionally, appliances and kitchenware exports to UAE gained significant steam, going from a negative growth of -44% in the corresponding period of last year to a 38% growth in Q3 2017. Demand for India-made appliances and kitchenware also saw a significant growth from Saudi Arabia, moving from -20% to 8% in Q3 2017.
Offering greater insight into India’s trade with the Mediterranean, Felder commented, “The growth in exports to Mediterranean countries has mainly come for East-Mediterranean. And this is owing to the political stability that is finally settling in Turkey, where we saw a lot of disruptions in the first half of this year.”
Congratulating India on successfully diversifying its trade basket, Steve added, “One of the key success factors to India’s global trade growth is that India has successfully forged trade relationships with multiple geographies and in multiple commodities. By doing this, we have not only ventured into newer markets, but have also balanced out the opportunities and challenges that come to us in the form of peaks and troughs each geography witnesses as a result of its own local dynamics.”
Imports lose sheen in East India while other 3 regions propel ahead
India’s imports advancement is mainly a result of western India showing a significant jump of 8%, as opposed to the negative import growth registered by the region in the corresponding period last year.
Additionally, north India and south India recorded 13% and 11% growth respectively, with their combined volumes substantially impacting overall growth.
These surges have been on the back of increased demand for a range of commodities:
Imports to east India, on the other hand, have shrunk by 3% from last years’ 10% growth, with China emerging as east India’s main trading partner, as the import of China-made products into the region grew by 35%. Imports of China-made products to western India has also grown significantly by 19%, led by electronic appliances, furniture, metals and paper.
Said Felder, “The growing middle class, coupled with developing industrialization, bodes well for imports into India going into 2018”.
Changing preferences altering India’s import patterns
As tensions between North and South Korea escalate, India’s import of paper has switched from South Korea to the United States and Saudi Arabia. In the corresponding period of last year, paper imports from South Korea grew by a whopping 427%, which is now at a negative 22%.
On the contrary, import of paper from the United States and Saudi Arabia, which were in the negative last year, are now growing at a healthy 19% and 11% respectively.
Imports of reefer cargo too witnessed marked growth in Q3 2017, especially from Mediterranean countries moving from being in the negative in the corresponding period last year to 49% growth this year. Reefer cargo imports from the United States also grew, albeit at a much slower pace of 14% as compared to the robust 31% growth it registered in the corresponding period last year.
Some of the other significant import drops witnessed in Q3 2017 are:
A glance into 2018
In total, the import-export market in India has grown 7.7% in the first three quarters, in spite of myriad challenges. Given the evolving positive trends, we expect this growth to at least be maintained, and possibly grown further in 2018. Growth can be further sped up by the swift implementation of the various infrastructure projects, such as Sagarmala and Dedicated Freight Corridors.
Source: Press ReleasePrevious Next