Export trend analysis for Indian exports - Sept 2023

Monthly aggregate merchandise exports provide a snapshot of India's economic health and the global market. While it's tempting to draw conclusions from this data, I'd caution against it unless we're observing broad patterns. For impactful policy decisions, a deeper dive is essential, albeit with some delay due to data lag.  Now, let's venture into this intriguing data analysis. Here's the latest monthly exports figures, in USD billion dollars, for merchandise exports from India:  Month  Trade Balance  Total Exports YoY growth Exports minus POL YoY growth Apr-22 -18.4 39.7 29.1 31.8 17.4 May-22 -22.1 39.0 20.8 30.5 13.1 Jun-22 -22.1 42.3 30.1 31.7 11.0 Jul-22 -25.4 38.3 8.0 30.2 1.7 Aug-22 -24.9 37.0 10.9 28.5 -0.7 Sep-22 -28.0 35.4 4.7 28.1 -1.7 Oct-22 -26.3 31.6 -11.6 25.3 -16.7 Nov-22 -22.1 34.9 9.7 26.8 1.9 Dec-22 -23.2 38.1 -3.1 29.7 -8.6 Jan-23 -16.4 35.8 1.6 28.1 -8.4 Feb-23 -16.2 37.0 -0.4 29.2 -3.6 Mar-23 -18.1 41.9 -6.0 33.6 -3.4 Apr-23 -15.5 34.7 -12.7

Trade Finance developments and India

Trade finance is a vital aspect of international trade, enabling businesses to import and export goods and services across borders. In recent years, there have been several significant developments in trade finance, particularly in the area of digitalization. One of the most significant developments in trade finance has been the adoption of blockchain technology. Blockchain provides a secure, transparent, and tamper-proof platform for trade finance transactions, enabling faster, more efficient, and more secure processing of trade documents. We can expect many documents, including title documents such as the bill of lading to go blockchain based. Another development in trade finance is the growing use of digital platforms and tools for trade finance operations. These platforms allow businesses to manage their trade finance operations more efficiently, including the issuance and processing of trade finance documents, and enable faster and more secure payment processing. The Factoring Reg

India's Petroleum Trade: An overview and some analysis

I thought of creating one comprehensive diagram that could capture everything about India's Petroleum, Oil and Lubricants (POL) trade for the calendar year 2022. The result is a Sankey diagram you see below (you can zoom it as it's a high res image):  The domestic production mentioned on the left-hand side pertain to domestically drilled crude oil in India. The data for this is taken from MoPNG's website. The rest of the trade data is from DGCIS. India majorly imports crude and exports refined petroleum products.  India has 23 refineries with a total installed capacity of around 250 MT per annum . These refineries process crude oil into various petroleum products that meet domestic as well as international standards and specifications.  A recent trend that has emerged in India's petroleum trade is the increase in crude oil imports from Russia. The main reason behind this surge in Russian crude oil imports is the geopolitical situation arising from the conflict between

Akamaisation, friendshoring, nearshoring etc.

What's Akamaisation ? Akamaisation refers to the idea of companies going local in order to remain global. I had proposed this term as a parallel to the concept of deglobalisation. The concept of Akamaisation arises from the need for multinationals to adjust their international supply chains in response to changes in the globalisation landscape. Companies are leveraging Industry 4.0 advancements such as automated manufacturing, robotics, and IoT to create more agile and localized production processes in response to the developing geopolitical and economic competitions. To provide a brief background, the good years of globalisation were marked by a concentration of production in labor-intensive countries, such as China and nearby countries like Taiwan, Korea, and ASEAN. This was due to factors like falling tariffs, technological advancements, and logistics optimisation. However, data suggests that this model peaked around 2012-13, a few years after the financial crisis. Both merchan

Sovereign gold bonds are naked calls written by the government

The Reserve Bank of India (RBI) issues sovereign gold bonds (SGBs). These bonds are denominated in grams of gold at current prices. I believe SGBs are the best way for individuals to invest in gold. They offer a 2.5% return each year on the invested amount. At redemption after 8 years, the bondholder will receive the equivalent price of gold in grams. Additionally, SGBs are exempt from capital gains. No other gold investment scheme can compare. In fact, regular gold-indexed funds charge management fees. From the government's perspective, SGBs are similar to "naked calls". No matter what the future value of gold is, the government will give the bondholder that price at redemption. While the government pays a 2.5% annual coupon, it also writes this "naked call" on top, due to the price promise. Is the government losing money? Let's examine. The government can raise money by issuing regular sovereign bonds, which it usually does. Currently, these need to pay ar

Understanding semiconductors industry through 10 minutes with chatGPT

This is the chat transcript with chatGPT, the latest large language AI model that's shaking the world. The chat lasted less than 10 minutes. I haven't edited any of the answers. I tried gaining a basic understanding of semiconductors industry and some policymaking aspects around it.  TK:  what is the size of semiconductors market in the world? chatGPT: The size of the semiconductor market in the world varies from year to year, but it is generally considered to be a large and rapidly growing market. According to a report from the World Semiconductor Trade Statistics (WSTS) organization, the global semiconductor market reached $529 billion in revenue in 2020. This represents a decline of 10.5% compared to 2019, due to the impact of the COVID-19 pandemic on global economic activity. However, it is expected to grow in the coming years as well. TK: How much of market does the semiconductors support downstream? For example, semiconductors are used in mobile phones, computers, applian