“Besides, non-oil and non-gold imports were $12.46 billion in April 2020, recording a negative growth of (-) 52.18 per cent, as compared to non-oil and non-gold imports of $26.05 billion in April 2019.” Consequently, India’s trade deficit narrowed to $6.76 billion on a year-on-year basis in April from $15.33 billion reported for the corresponding month of last year. “Despite the graded relaxations in the current month, the levels of merchandise exports and imports are likely to remain subdued in May 2020 as well,” ICRA’s Principal Economist Aditi Nayar said. “However, a pause in remittances may prevent a current account surplus in Q1 FY2021.”

According to EEPC India Chairman Ravi Sehgal, over 60 per cent drop in merchandise exports during April is a not surprising “given a near halt in the global trade”. “While the trade, especially of essentials like food and medicine is partially opening across the international borders, it would be a long haul before normalcy returns in the wake of the world grappling with the Covid-19 pandemic. “Exporting units, especially in the engineering sectors, are largely MSMEs and face an existential crisis. While the MSME package would provide liquidity infusion, the units need straightforward fiscal support like waiving of electricity charges, water bills, and wage support for survival,” he said.