Russia’s invasion of Ukraine has resulted in two significant developments, which have subsequently sparked a surge in India’s fuel exports. The first is the increased import of cheaper crude from Russia. Second, more countries are depending on India for their fuel needs.
In the last five years, the export of petrol and high-speed diesel by public sector units in India to countries other than Nepal and Bhutan almost doubled from 3,353 TMT to 6,376 TMT (thousand metric tonnes). Petroleum products were the most exported commodities from India to the Netherlands, China, Singapore, the U.K., the UAE, Saudi Arabia, Brazil, Indonesia, Turkey and South Africa in FY23 (April 2022 to January 2023). The Netherlands imported $8,890 million worth of petroleum products from India — the highest by any country in that period. This was a 186% increase from the country’s imports five years ago.
Refineries in Gujarat are at the centre of this sudden fuel export boom. The State exported ₹4.9 lakh crore worth of petroleum products in FY23. In contrast, Karnataka, the second biggest exporter of the commodity, sent out only ₹0.44 lakh crore worth of petroleum oils, which is more than 10 times less than Gujarat. Overall, Gujarat exported 77% of India’s petroleum oils in FY23.
Export of petroleum oils formed over 65% of Gujarat’s total exports in FY23. In no other State except Himachal Pradesh did a single product dominate exports to this extent. Exports of medicaments formed 79% of Himachal Pradesh’s total exports. Moreover, the export of petroleum oils formed over 21.7% of Gujarat’s GSDP in FY23, the highest share among all the States. Goa was a distant second with the export of medicaments forming 4.9% of its GSDP that year. No other State crossed the 4% mark.
All these factors have boosted Gujarat’s share in India’s exports. Gujarat’s share in India’s exports increased from 20.8% between FY18 and FY21 to 30% in FY22 (Chart 1). No other State recorded such a jump. Odisha came close with its share increasing by 1.5% points in that period. On the other hand, Maharashtra’s share declined from 21.4% to 17.3%.
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The recent surge in India’s exports is mainly fuelled by petroleum products, the most exported commodity in three States — Gujarat, Karnataka and Bihar (Map 2). The map shows the most exported commodity in value terms across States. In Punjab and Haryana, basmati rice was the most exported item, while in Kerala and Andhra Pradesh, it was vannamei shrimp. Diamonds from Maharashtra, unset gold from West Bengal, smartphones from Tamil Nadu and Uttar Pradesh, and tea from Assam were the other most exported items. Medicine for retail sale was the most exported item from Goa, Himachal Pradesh, Jammu and Kashmir, Telangana and Sikkim.
Diamonds, the most exported commodity from Maharashtra in value terms in FY23, formed 38% of the State’s exports and 2.6% of the State’s GDP (Table 3). In that year, Maharashtra exported ₹90,320 crore worth of diamonds, but that was still about five times less than Gujarat’s petroleum oil exports that year. Though the most exported commodity from Tamil Nadu is smartphones, it formed only 13% of the State’s total exports. This is because the State exports a diverse set of goods.
Table 3 | The table shows the most exported commodities’ share in a State’s total exports and its GSDP in FY23
In five States, the most exported product formed over 50% of their total exports. Goa and Himachal Pradesh (medicaments), Gujarat and Bihar (petroleum oils) and Assam (tea) showed high dependency on a single product.
Source: Commerce Ministry, State budgets and MOSPI
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