Retail sales and inflation both on the rise
Retail sales in India in December 2021 grew 7% over the pre-pandemic levels of the same month in 2019, according to the Retailers Association of India (RAI).
In its latest retail business survey, the RAI said the sector witnessed 26% growth over December 2020. CEO Kumar Rajagopalan said: “Retail business was on a steady growth trajectory during most of December; however, the pace of growth was seen dropping off significantly towards the last week of December due to the fresh sets of curbs imposed in most parts of the country owing to the third wave of the pandemic.”
However, retail inflation also rose to 5.59 % in December, mainly due to a rise in food prices, according to government data. The Consumer Price Index (CPI) based retail inflation was 4.91% in November 2021 and 4.59% in December 2020.
According to the National Statistical Office (NSO), food inflation rose to 4.05% in December compared with 1.87% in the preceding month.
Meanwhile, the Reserve Bank of India (RBI) said it expected inflation to be higher over the rest of the year. It said it expected headline inflation to peak in the fourth quarter of the current fiscal year, falling in 2023.
China trade continues to grow
India’s trade with China hit $125 billion in 2021, with imports from China nearing a record $100 billion, underlining continued demand for a range of Chinese goods, particularly machinery.
Data from China’s General Administration of Customs (GAC) released this month show the value of goods imported by India from China exceeded the total bilateral trade in 2019. Trade fell from $92.8 billion in 2019 to $87.6 billion in 2020 on account of the pandemic.
Trade has boomed in 2021, thanks to a recovery in demand as well as rising imports of new categories of goods such as medical supplies. Bilateral trade reached $125.6 billion in 2021, with India’s imports from China accounting for $97.5 billion.
Imports were up by 30% from 2019, while India’s exports to China, amounting to $28.1 billion, were up by as much as 56% from two years ago. The trade deficit last year reached $69.4 billion, up by 22% from the pre-pandemic figure in 2019.
GAC spokesperson Li Kuiwen said China’s medical exports had more than doubled in 2021 while laptops and home appliances were up 13%, with a growing global demand for ‘stay-at-home’ appliances. Despite China’s robust trading performance and the recovery in 2021, with imports and exports up 30%, officials warned of the threat of disruptions to global supply chains as the world continues to deal with the impact of the more transmissible Omicron variant in the new year.