Import Growth to recover in 2017

Posted by Daily Shipping Times on 21-06-2017        Tweet

MUMBAI : India’s export import container trade volumes have grown by 7% in the first quarter of 2017 as compared to 10% in the same period last year. The slowdown has been due to a short-term decline in imports.  While the container export volumes have registered a growth of 8% in Q1, same as the year before, import growth volumes declined to 5% against 13% in Q1 2016.

“This dip in import growth was due to piling up of inventory in the market post demonetisation and lack of clarity around Good and Service Tax. It is noteworthy that despite the looming threat of the current geopolitical environment worldwide on global trade, India has been able to maintain its growth trajectory.” Mr. Franck Dedenis, Head of West Central Asia Trades.

The country’s growth performance has indeed been stronger than global trade, which in the past two quarters has increased to around 4-5%, driven by improvements in exports to regions such as Far East, North America and Latin America.


•             North America, Saudi Arabia and emerging economies in Latin America, Africa and Asia are leading India’s export growth. 

•             Highest growth in export volumes has come from India’s sub-continent neighbour, Sri Lanka has propelled demand for metals, stones, sulphur and plaster to fulfil ongoing infrastructure development projects.

•             Though the economy of North America is growing the slowest since the last three years, trade with the continent has grown 5% driven by demand for fish, plastic and rubber, metals, textiles, apparel and accessories.

•             Demand for salt, sulphur, earths, stone and plaster has grown by a whopping 400%. Contrary to this, pharmaceutical exports have registered a negative growth.


•             Exports to countries like Algeria, Italy and Spain increased by 48%, 10% and 9% respectively; Algeria saw a dramatic rise in beef and auto imports from India which has led to this substantial increase.

•             However, demand for Indian garments, fruit and nuts has dipped sharply in major markets like United Kingdom, Germany and France.

•             The decrease in exports to these countries though has been offset by an increase in demand from Russia for vehicles and metals and from Denmark for appliances and kitchenware.

•             Exports to Turkey and Egypt saw negative growth in the wake of a series of terrorist attacks and domestic political turmoil in the former and ongoing currency issues in the latter.

“Traditionally, United Kingdom is India’s largest export market in the region. However, a spending binge in the holiday season last year followed by rising prices post Brexit and news of France potentially cutting off ties with EU have affected consumerism negatively in the UK which has resulted in this drop. Additionally, the appreciation of the rupee against the euro has adversely impacted India's exports to the EU bloc.” Franck Dedenis, Head of West Central Asia Trades.

On the matter of imports from Europe, however, this has remained flat as against an 8% growth in 2016.

•             Commodities that saw growth in import volumes include automobiles and wood pulp from Germany, Chemicals from Belgium, marble and other stones from Italy, appliances and kitchenware from Turkey and finally papers, plastics and rubber from Spain.

•             On the other hand, paper and iron/steel scrap from United Kingdom, metals and chemicals from Russia and metal scrap from Netherlands have registered negative growth.

Adds Dedenis “The time taken to revive the economy after demonetisation in Q4 of 2016, and the uncertainty around implications of GST in Q1 2017 led to conservative buying patterns in India which are the main reasons for the drop in demand and hence drop in imports.”


Indian refrigerated cargo has been growing consistently with the demand for commodities like vegetables, meats and sea food on the rise. Infact, India has consolidated its top spot as the largest exporter of beef to Vietnam. “Although, Vietnam is the biggest buyer of Indian beef, it is just a destination market and from Vietnam Indian beef finds its way into China where the consumption is very high. Lower prices, along with the proximity to key markets in Southeast Asia and West Asia, gives a huge competitive edge to Indian buffalo meat exports”, avers Dedenis. He adds, “To stay ahead in technological innovation in refrigerated containers, Maersk Line recently became the first shipper to invest in Star Cool reefers by Maersk Container Industry (MCI) which will help power cold chain transparency and raise the Industry standards in the segment.”


Imports of products such as furniture, electronics and automobiles from China, United States and Germany have been hit by negative growth owing to evolving economic reforms.

“These commodities are cash sensitive and have been impacted by demonetisation, effects of which were felt in the first quarter of the year. In fact in some cases inventory from the previous quarter also trickled into the first quarter of this year. In addition to that, with GST rollout around the corner, a lot of people have taken a wait and watch approach towards making high-end purchases on certain consumer products,” points Dedenis.

•             Imports from North America registered a negative growth of 9% as compared to 29% growth in the same period last year.

•             Domestic demand for wastepaper which is a high moving commodity declined mainly due to demonetisation.

•             However, imports of textiles and apparel, fruits, nuts and plastics remained strong and saw growth.


Domestic reforms have slowed down India’s trade momentarily, thereby weakening domestic demand. However, A.P. Moller – Maersk expects Indian export import trade to pick up pace in the next quarter. Policies such as GST are taking final shape and the global economic outlook for 2017 is offering favourable prospects. According to the World Trade Organisation (WTO) the value of goods shipped around the globe is expected to grow by around 2-4% in 2017, up from just 1-3% in 2016.

“India’s export import trade forecast remains strong and we expect growth in imports in Q2 as the effects of demonetisation are expected to fade away. The Country is also expected to benefit from the predicted improvement in global trade. But these prospects come with a caveat; the recovery will be much slower if protectionist policies and restrictions on imports persist.” says Dedenis.

Container trade growth signifies an overall improvement in the global economy as compared to 2016. In the past two quarters, global demand picked up by around 4-5%, driven by improvements in most regions, especially Far East, North America and Latin America imports.