Trade data for the first six months of 2021-22 indicates that the imports to India are back to the pre-pandemic levels of 2019-20 without any major change in the source countries. The imports increased to USD 273.9 billion during the first half of 2021-22 compared to USD 151.94 billion during the same period in 2020-21, and USD 248.08 billion in 2019-20.
The value of India’s imports in 2020-21 was around USD 394 billion, lower than that of USD 474 billion in 2019-20. The first few months of 2020-21 coincided with the initial spread of the COVID-19 pandemic in the country, which resulted in lockdowns & restrictions. These measures affected public movement and in turn the economic activity in the country. The fall in imports in 2020-21 is on expected lines because of the COVID-19 impact. In 2020-21, the volume of exports also fell to USD 291 billion from USD 313 billion in 2019-20.
However, an improvement is witnessed during the first half of 2021-22, compared to the same period in 2020-21. The imports during the first half increased from USD 151 billion in 2020-21 to nearly USD 274 billion in the current financial year. Similarly, the exports increased from USD 125 billion in 2020-21 to USD 198 billion during the first half of 2021-22.
In an earlier story, we discussed the trends of India’s trade with China post the COVID-19 pandemic. With the most imports, China is India’s number one import partner. It is also one of the leading export destinations for Indian products. In this two-part series, we look at the trends in India’s trade other leading trade partners (excluding China) in the last few years and assess the impact of COVID-19. In the first story, we focus on the impact on imports post the COVID-19 pandemic i.e., during 2020-21 as well as during the first half of 2021-22.
Major fall in Imports in 2020-21 from Saudi Arabia, Iraq & Nigeria
In the earlier story, we highlighted that there was only a marginal change in the imports from China, even though the overall imports in 2020-21 fell compared to the previous year. This fall in the overall imports is contributed by reduced imports in varying degrees from many of the top import trading partners.
Imports from the USA, the second-largest source of imports after China, witnessed a decrease of 19% in 2020-21. Value of imports from the USA fell to USD 28.9 billion in 2020-21 compared to USD 35.8 billion in 2019-20.
However, the major fall in imports during 2020-21, was from Saudi Arabia & Iraq. The total value of imports from Saudi Arabia fell by nearly 40% i.e., from USD 26.8 billion in 2019-20 to USD 16.2 billion in 2020-21. Imports from another major trading partner, Iraq, also reduced by around 40% from USD 23.7 billion in 2019-20 to USD 14.1 billion in 2020-21. The volume of imports from Nigeria is comparatively lower than in these countries. However, it is generally among the top 15 trading partners of India. Imports from Nigeria fell by nearly 45 % from USD 10.2 billion in 2019-20 to USD 5.7 billion in 2020-21.
Almost all the top 15 import partners of India witnessed a dip in the value of imports in the pandemic year of 2020-21 compared to 2019-20. Only Switzerland is an exception, whose imports to India increased in 2020-21. The imports from Iran, Germany and Hong Kong were on the decline in 2019-20 itself.
Imports from major countries back to 2019-20 levels during the first half of 2021-22
The Ministry of Commerce & Trade has recently published the trade information for the month of September 2021. In other words, complete data for the first half of 2021-22 is now available.
The imports increased to USD 273.9 billion during the first half of 2021-22 compared to USD 151.94 billion during the same period in 2020-21. In the year before i.e., 2019-20, the value of the imports was USD 248.08 billion in the first half.
We have already highlighted that the imports from China during the first half of the current financial year have already crossed the levels of the pre-COVID year of 2019-20. The same can be said for most of India’s leading import partners. Iraq & Saudi Arabia, countries from which imports fell significantly in 2020-21 witnessed increased imports during the first half of 2021-22 with the numbers reaching the 2019-20 levels.
Switzerland, UAE & USA are among the countries whose imports also increased during the first half 2021-22 compared to the same period in 2020-21. Switzerland which reported an increase in imports to India in 2020-21, reported a fall in imports during the first half of 2020-21. However, imports to India from Switzerland again increased during the first half of 2021-22 and crossed the 2019-20 levels.
Imports from Switzerland, UAE & USA increased significantly during the first half of 2021-22 compared to the same period in 2020-21.
Fall in imports during 2020-21 majorly due to the fall in Crude Oil imports
In 2019-20, around 20% of the total value of imports to India were of Petroleum Crude (HS Code: 2709). As noted in one of Factly’s earlier stories, India imports close to 90% of its crude oil requirements. Petroleum Crude worth USD 102 billion was imported in 2019-20, which fell to USD 59.47 billion in 2020-21, a reduction of more than 40%. The fall in the value of imports in Saudi Arabia, Iraq and Nigeria as highlighted earlier can be attributed to the fall in the imports of crude oil.
Petroleum crude forms a major part of the larger product category of “Mineral fuels, Mineral Oils and Products of their distillation, Bituminous Substances, Mineral Waxes” (HS Code: 27). There is a 35% fall in the value of imports in this category between 2019-20 and 2020-21. The fall in the value of imports for most of the other major import categories has been comparatively nominal.
“Iron & Steel”, “Aircraft & Spacecraft parts”, “Nuclear Reactors, broilers, etc.” have also witnessed a decline in the value of imports. Most of the decline in the imports are of inputs & raw materials for further processing. The impact of closure & restrictions on economic activity for a major part of 2020-21 was visible in the import numbers of 2020-21.
The fall in imports from the USA along with Kuwait & France contributed to the fall under “Airspace & Spacecraft parts”. In an earlier story, we highlighted that “Iron & Steel” was one of the import categories from China that witnessed a decline. The fall in imports of “Iron & Steel” contributed to the fall in imports from Germany, Indonesia, Japan & South Korea.
While Switzerland contributed to an increase in imports in the case of “Animal & Vegetable Oils & Fats”, the increase in imports from Switzerland is also due to an increase in imports of “Fertilizers” along with articles relating to metals like Nickel, Aluminium, Zinc, etc.
Even in the case of Switzerland, the imports of products like optical instruments and others decreased. Among the products that have contributed towards the increase in imports during the first half of 2021-22, Petroleum Crude played a major role. This also meant that the imports from Saudi Arabia & Iraq are back to the levels of 2019-20 during the first half of 2021-22.
“Natural & Cultured Pearls, Stones, Metals” etc. is another major category import of which have increased from USD 13.08 billion to USD 39.85 billion during the first half of 2021-22. Switzerland, South Africa, UAE & USA are the countries that have contributed to the increase in imports for this product category. The imports for this product category from these countries fell during 2020-21 and have revived back to the levels of 2019-20.
Import trends suggest revival to pre-pandemic levels without major changes
Review of the data for the leading import partners of India (excluding China) shows that:
- There was a steep fall in imports in 2020-21, especially because of a fall in the imports of petroleum crude.
- The value of imports during the first half of 2021-22 are at par with the value of imports during the same period in the pre-pandemic year of 2019-20.
At the same time, there is no major change in the list of countries that have earlier imported substantial volumes in certain product categories. Most of these countries regained their position as top import partners, without another country substituting them. This is visible in the case of Saudi Arabia & Iraq for Petroleum crude or USA, UAE, Switzerland, etc. for precious metals & Stones. In the case of a few countries like Iran, the declining trend of imports to India which began even before 2020-21 continued even in 2021-22.
Overall, the imports during the first half of 2021-22 are back to the pre-pandemic levels of 2019-20 without major changes in the source of imports. China remains India’s largest import partner even in 2021-22.
In the next story, we explore the trends in exports from India for some of the leading export partners other than China.
Featured Image: Imports to India