Export-induced Loss in Employment and Earnings during the First Year of the COVID-19 Pandemic

The COVID-19 pandemic has been an unprecedented exogenous shock in the world economy unlike the global financial crisis in 2008, which was endogenously determined in the structure of capitalist financial market. Given the fact that Indian export sector significantly contributes to the Indian economy in general and employment in particular, it is worth examining how the Indian gross domestic product and exports changed in comparison with the world GDP and world exports respectively, in the first year of the COVID-19 pandemic in 2020–21 vis-à-vis the GFC in 2008. Which industries are affected the most, in terms of export loss, during this COVID-19 crisis? What have been the consequences of these falling export on employment and earnings in the Indian export sector? This study estimates that in the COVID-19 year 2020–21, Indian exports have fallen by `3.74 lakh crore, with a plausible loss of direct employment by 5.06 lakh and an estimated loss of earnings around `12.4 thousand crore across 85 commodities.

Unlike the global financial crisis (GFC) 2007–08, the COVID-19 outbreak has been an unprecedented exogenous shock that spread across the globe. While the GFC had contracted world output by 1.3%, at the same time, India’s gross domestic product (GDP) grew by 5% in 2009 (United Nations 2020). In the first year of the ongoing COVID-19 crisis, however, India faced a deeper economic downturn as its GDP declined by 8%, while the world output contracted by 3.3% in 2020 (IMF 2021).

Against this backdrop of economic contraction in the world economy in general, and India in particular, global trade has witnessed a downturn too. The latest data covering the first fiscal year of COVID-19 pandemic between April 2020 and March 2021 (2020–21) confirms that India’s export is still about 7.8% lower than the level of exports in 2018–19, and 4.7% lower with respect to 2019–20. India’s exports in the fourth quarter of 2020–21 has been about 0.8% lower than that of corresponding quarter of 2018–19 (National Statistical Office 2021).