India sees trade surplus after 18 years

THE CONTEXT

India posted its first trade surplus in nearly two decades due to Covid-19-led drop in demand for crude oil, gold and other merchandise goods.The last time India had a trade surplus was in 2002.

MERCHANDISE TRADE- EXPORTS

(INCLUDING RE-EXPORTS)

Major commodity groups Which is rocorded positive growth during June 2020 vis-a-vis June 2020 are iron ore (63.11%), oil seeds (50.48%), Rice (32.72%), oil meals (27.36%), spices (22.92%), Other cereals (19.35%), Organic and inorganic chemicals (19.06%),  cereals preparation and miscellaneous prosses items (13.8%), Fruit and vegetable (11.01%), Drugs and pharmaceutical (9.89%), tobacco (3.56%), coffee (2.58%).

WHAT DOES IT INDICATE? 

This would provide some support to the indian rupee.On the other hand, declining imports, an indicator of poor domestic demand.

FUTURE SCENARIOS

Regional lockdowns in some Indian states, along with an uncertain employment scenario,Will keep consumption-related imports subdued.India’s current account balance alsorecordeda marginal surplus at 0.1% of the gross domestic product (GDP).