India's containerized trade with the World has
enjoyed a spirited uptick in the first quarter of calendar year 2018, as it
beat the Country's past performance in export-import growth over eight
quarters. Imports witnessed a material increase of 16 per cent, with exports
also growing at a healthy pace of 7 per cent. Together, they led India's trade
to a strong start this 2018.
numbers become more relevant when viewed through a global lens. They are
significantly higher than estimated global containerized demand growth of 3 to-4
per cent ," explains Mr. Steve Felder, Maersk Line Managing Director for
India, Sri Lanka, Bangladesh, Nepal, Bhutan and Maldives.
contributor to import growth during this period was dry cargo (commodities that
aren't liquid or perishable), which jumped by 22 per cent. This contrasts with
the corresponding period last year when the segment grew only 2 per cent.
Recyclables, namely paper and metal, were the
two dry cargo commodities that led this growth and registered strong 61 per
cent and 55 per cent 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 per cent and 13 per cent respectively.
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
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."
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 per cent.
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.
INDIA WITNESSES HIGHEST EXPORT DECLINE
comparison of the export performance of India's four regions shows that East
India saw the highest decline in exports this year at minus-6 per cent 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 per cent and 20 per cent respectively. In
contrast with Q1 last year, East India led the Country's overall export growth
at 29 per cent.
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.
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
other hand, imports of pulses into East India saw an upward climb, particularly
chick peas and yellow peas from Canada and Turkey.
made vehicle exports lead India's overall export growth
At 18 per
cent export growth, Indian made vehicles gained in demand across Africa, Latin
America and Turkey. This was largely led by the 2-wheeler and 3-wheeler
India fast becoming a key automotive manufacturing hub, OEMs across the board
are investing in increasing their production capacity in the Country. This is
in turn also benefiting the auto ancillaries' industry, and creating a
multiplier effect in auto exports from India," says Felder.
exports were largely driven by Western India, which clocked an impressive 71per
cent growth, up from 13 per cent last year.
import side, vehicles from Germany registered a strong uptick with imports
coming into South India which is one of the major auto assembly hub for the
automobile Imports to this region saw a significant turnaround going from a
contraction of 12 per cent last year to a robust 28 per cent growth in the
corresponding period this year.
TRADE GROWTH SLOWS DOWN
overall reefer (refrigerated cargo) trade growth slowed on the export as well
as import side. However, a strong increase was registered by exports of
commodities like pharmaceuticals to North America and grapes to North Europe.
import side, inflow of reefers slowed. This was due to a slowing growth from
Mediterranean countries (8 per cent up, from 82 per cent up last year) and
contraction of 33 per cent from North Europe (compared to a 35 per cent
increase last year).
across the world are considering policies to reduce their healthcare spending,
and pharmaceuticals contribute a major portion of these expenses. The cost
arbitrage India offers, combined with improving quality in manufacturing, is
contributing to India's growing play in pharmaceutical exports. Export of
grapes on the other hand, are more cyclical and seasonal in nature,"
TREND TO CONTINUE THROUGH UPCOMING QUARTERS
trading economies such as China and US sparring over their trade relations,
India as well as other emerging countries are expected to witness strong
inflows of select commodities.
adds, "Commodities have to find markets, and as India's domestic
consumption continues to rise, we can expect to see many of them find takers
here. Also, the increasing aspiration of India's populace will sustain this
trend over the months to come, assuming there are no significant policy