Nov exports to US surge, but a trade deal is still key, Pg12

Key Highlights:

• India's exports to the US surged by 22% in November, reversing declines in September and October.
• Overall goods exports increased by 20% in November, driven by growth in exports to the US, China, Hong Kong, and European countries.
• Indian exports to China and Hong Kong jumped by 90% and 35%, respectively, due to geopolitical factors.
• Exporters are absorbing tariff costs to maintain US market access, anticipating a trade deal.
• A weaker rupee, which fell to 90.79 per dollar, aided exporters by making Indian goods cheaper.

Detailed Insights:

• The surge in exports to China is partly due to restrictions imposed by Beijing on imports from Japan, leading to increased demand for Indian seafood.
• Exports to European countries rose in anticipation of the Carbon Border Adjustment Mechanism (CBAM) implementation, which will increase duties on Indian engineering products.
• Despite the export surge, Tiruppur's exporters have lost nearly Rs 7,000 crore in winter orders from the US, impacting the manufacturing hub.
• The Red Sea crisis in October 2024 had caused disruptions and higher shipping costs, creating a low base for comparison with November's export figures.
• Growth in tariff-exempted goods like electronics and drugs & pharmaceuticals contributed to the export surge to the US.
• Engineering goods exports have stabilized, with a surge in exports to Germany, Spain, and Belgium.

Key Concepts Involved:

• Tariff: A tax or duty imposed on goods when transported across international borders.
• Carbon Border Adjustment Mechanism (CBAM): A carbon tax on imports of certain goods from countries with lower environmental standards.
• Rupee Depreciation: A decrease in the value of the Indian rupee relative to other currencies, making exports cheaper.