Measuring trade: On the need for consistent export, import data
India’s export, import data should be consistent and its timing predictable
The Government has quietly dropped the practice of releasing preliminary monthly merchandise trade estimates at the beginning of the month, and updating them two weeks later with ‘ quick ’ estimates. The foreign trade numbers for October 2022 and beyond will be released by the middle of the next month, as was the practice till two years ago. Perhaps the idea of issuing early estimates for export and import shipments in late 2020 was driven by the need to have some more high frequency indicators for assessing the direction of the economy as it found its feet again after the battering from COVID-19 lockdowns. While one cannot really say the pandemic is over yet, it is a sensible decision to now revert to the older system when ‘ quick ’ estimates were released on the fifteenth day of each subsequent month, or earlier if that date happened to fall on a weekend. The early estimates have emitted conflicting signals about the economy in recent months, thanks to sharp variations between the preliminary and ‘quick’ estimates in the volume of trade and even the direction of exports growth. For instance, the first data set for August suggested a 1.15% contraction in exports — the first such contraction since February 2021 — while September’s numbers showed a 3.5% dip year-on-year. Even as industry and economists read this as an omen of the global turmoil and slowdown coming home to hurt the Indian recovery engine, the ‘ quick ’ estimates for both these months showed a 1.6% and 4.8% uptick, respectively, in outbound goods trade.
The difference in the two sets of numbers largely arises from the lack of electronic data interchange facilities at some ports, thus making it difficult to factor in such shipments into the first data set. But with variations so wide, it is smarter to wait till all the data is compiled and released at one go — even as attempts must be redoubled to ensure all ports onboard the electronic data system. The Government should now stick to a clear time table for releasing the trade data — recent months were also marred by suspense over when the initial estimates would be released and the last set came about 90 minutes before midnight on October 3. It should also refrain from being selective about data points. For March, it initially only released export numbers, and September’s preliminary data omitted the growth rates for India’s top 10 export, import items. A consistent, comprehensive and transparent approach to releasing economic data will also bolster the country’s credibility as a reliable alternative to China.