NEW DELHI - India is seeing a spurt in exports with the South Asian country's exports to Singapore also rising, going up by 30 per cent in 2021 from the previous year.
Exports of petroleum products, including bitumen, and gems and jewellery to Singapore in particular saw a spike that trade experts believe is partly due to pent-up demand after disruptions caused by the Covid-19 pandemic.
"If you look at the kind of things that have gone up, like gems and jewellery, it is clearly pent-up demand, and petroleum products, too, is recovering in a way. Still, we will have to wait and watch what happens in 2022," said Prof Biswajit Dhar, a trade expert from Jawaharlal Nehru University.
India's exports to Singapore of gems and jewellery went up from US$282 million (S$382 million) in 2020 to US$658 million in 2021, an increase of 133 per cent.
Overall exports dipped from US$6.9 billion in April to December 2019 to US$6.3 billion in 2020 before rising to US$8.2 billion for the same period in 2021, according to India's Commerce Ministry figures.
"We don't know what is going to happen. But exports are plugging the deficient domestic demand. This is not a bad thing at all. Trade has become the engine of growth as domestic demand is still some way off from levelling off," added Prof Dhar.
India is poised to be the fastest-growing economy in the world this year, according to the International Monetary Fund. Still, consumption, a key driver of the economy, has been sluggish as a result of the upheavals caused by a stringent 21-day lockdown in 2020 and two waves of the pandemic.
Exports in this scenario have emerged as one bright spot in the economy.
Mr Gaurav Bhatnagar, head of trade and working capital for India and South Asia at Standard Chartered Bank, said their research indicated that Indian exports to Singapore would continue to go up in the coming years in specific sectors.
He noted that growth would come in engineering exports as Singapore invests in precision engineering, apart from export of items like chemicals apart from IT services.
"India is strong in IT services and under Singapore's 'Smart Nation' strategy, most businesses are becoming digital. This creates a huge opportunity for the Indian IT industry... These are the big promising sectors, which will create jobs in India," he said
"Exports are picking up, on the back of strong demand in various Asean countries. It's not a one-off export growth due to Covid-19 recovery. The way it is growing is the way it is supposed to be."
Overall exports have gone up. India's total exports between April and December 2021 hit US$301.4 billion, up 49.7 per cent year on year.
"India's exports are showing robust growth in FY21-22. This augurs well for overall growth of the economy at a time when domestic consumption demand is yet to return to pre-pandemic levels. The strong growth in exports is also expected to generate more domestic jobs," said Dr Amitendu Palit, who is senior research fellow and research lead (trade and economics) at the National University of Singapore's Institute of South Asian Studies.
Pushing exports has been one key factor for the government rethinking its position on free trade agreements (FTAs) in spite of domestic opposition from small traders who are long-time supporters of the ruling Bharatiya Janata Party. The government is moving fast on FTAs with a clutch of countries, and concluded negotiations last week with United Arab Emirates.
"Exports going up means you could take advantage of being an early bird, and already occupying that space going forward may augur well," said Prof Dhar.
But he noted that exports would also require government oversight.
"The government will have to be proactive in order to see that momentum continues and doesn't fall from where we have reached. They need to identify all the areas of growth and ensure momentum is maintained."