- Saturday, April 27, 2024
By: Shubham Ghosh
INDIA’S monthly services exports have largely rebounded after an initial Covid-19 shock, a new Commonwealth trade analysis released in London on Tuesday (13) has found.
According to the 2021 ‘Commonwealth Trade Review’, the Commonwealth countries are estimated to have lost trade worth up to $345 billion in 2020, including $60 billion in infra-Commonwealth trade.
India’s overall merchandise exports and imports are estimated to have declined by 11.4 per cent and 11.9 per cent, respectively, between March and November 2020, as a result of the Covid-19 pandemic.
The report said even before the pandemic, a large share of India’s information and communications technology services were exported via Mode 1 – or cross-border supply enabled through digital means and hence were relatively more insulated from the pandemic’s adverse effects.
“India is a major driver of intra-Commonwealth trade and all parts of the Commonwealth need to work together if we are to recover swiftly and effectively from the COVID-19 crisis,” Baroness Patricia Scotland, the Secretary-General of the Commonwealth, said.
“India along with all Commonwealth members can harness the ‘Commonwealth advantage’ to provide a post-pandemic tailwind that supports a more inclusive, resilient and sustainable recovery,” she added.
The relatively high incidents of Covid-19 in India, in terms of infections and deaths, is a key factor that explains the trade figures based on the Commonwealth analysis of raw World Trade Organisation and Reserve Bank of India data.
The abrupt recession cause by the pandemic dampened India’s trade growth further but it found that monthly services exports have “largely rebounded after an initial COVID-19 shock in the first half of 2019, supported by exports of ICT-related services”.
The country’s foreign direct investment (FDI) is also found “stark contrast to the large declines in FDI witnessed globally and in most Commonwealth countries amid the COVID-19 pandemic”. Overall, FDI inflows to India are estimated to have expanded by more than $13 billion in 2020, a 29.5 per cent rise over the average annual inflows for 2017-2019, the report added. The growth in FDI inflows to India was fuelled by investments in consulting and digital sectors, including significant greenfield investment, and merger and acquisition (M&A) deals in energy and infrastructure, the report added.
“The pandemic has provided India with another opportunity to capitalise on this capacity as more and more services activities have moved online. The preliminary estimates show that the growth rate of the IT sector for 2019-20 has been approximately 10 per cent,” it said.
The review, entitled ‘Energising Commonwealth Trade in a Digital World: Paths to Recovery Post-COVID’, is seen as a timely analysis of the impact of the pandemic on trade and investment flows of Commonwealth member countries. It found that the pandemic has taken a heavy toll across the globe, substantially impacting all Commonwealth members’ economies and leading to $1.15 trillion in foregone gross domestic product (GDP) in one year.
