Monthly trade shows signs of major revival after an initial COVID-19 shock. The US ($51.6 billion) remained India’s top export destination.
As India's monthly exports hit the rebound button, it has found an unexpected ally in the immediate neighbourhood.
Bangladesh jumped four notches to become India’s fifth-largest export destination in the fiscal year ended 31 March 2021, as exports to many of the nation’s traditional markets shrank because of the pandemic while its eastern neighbour continued to report economic growth.
Exports to Bangladesh grew 11% in the previous fiscal year even as India’s overall exports contracted 7% because of the pandemic, according to government data. In general, India’s exports to most of its key destinations contracted due to the coronavirus pandemic – which severely disrupted supply chains. Among the country’s top 20 export destinations, shipments grew only to China (27.5%), Indonesia (21.7%) and Brazil (7%), apart from Bangladesh.
However, it is Bangladesh that raced ahead of countries such as Singapore ($8.7 billion), the UK ($8.2 billion), Germany ($8.1 billion) and the Netherlands ($6.5 billion). Even Nepal ($6.8 billion) jumped a notch to become India’s ninth-largest export market.
In FY21, India’s top export items to Bangladesh were cotton and cotton yarn ($1.5 billion), electricity ($517 million), fuel ($496 million), rice ($354 million) and corn ($328 million).
USA: $51.6 billion
China: $21.2 billion
United Arab Emirates: $16.7 billion
Singapore: $8.7 billion
The UK: $8.2 billion
Germany: $8.1 billion
Nepal: $6.8 billion
The Netherlands: $6.5 billion
Sanjay Kathuria, senior visiting fellow at the Centre for Policy Research, said the rise of Bangladesh as a sub-regional economic power is unambiguously good for India. “It’s growing middle-class provides a big market for Indian agriculture and manufactured goods, as well as for services. The FY21 trade data is proof of this.
In addition, Bangladesh is already the biggest source of medical tourists to India. Significantly, its increasingly ambitious private sector can be a major source of foreign direct investment in India’s North-East, and India’s north-eastern states as well as the central government should be paying attention to this aspect of Bangladesh’s potential," he told the Mint.