imports however surpassed exports and net exports contributed negatively to aggregate demand in q1202122 with 19 per cent in q1 which was 13 per cent a year agothe reserve bank of india released the monetary policy report on friday stating that while exports have been encouraging and merchandise trade have rebounded rising freight prices continue to pose a challenge buoyed by strong external demand and base effects exports registered a sharp expansion in q1202122 and the buoyancy continued to q2 merchandise imports also rebounded strongly on the back of the recovery in domestic demand higher crude oil prices and base effects the report read advt imports however surpassed exports and net exports contributed negatively to aggregate demand in q1202122 with 19 per cent in q1 which was 13 per cent a year agomeanwhile engineering goods organic and inorganic chemicals petroleum products cotton textiles and drugs and pharmaceuticals powered the merchandise trade at the same time labourintensive sectors which includes leather products apparels and tea continue to lag because of greater sensitivity to mobility restrictionsthe persistent upsurge in global container freight prices and the growing shortage of semiconductors however pose downside risks to a durable merchandise trade recovery it read the report explained that the world is currently facing an acute shortage of semiconductors which is the fourth most traded item globally after crude oil refined oil and cars the global semiconductor market is valued at 440 billion which accounts for nearly 5 per cent of global goods trade the sector is expected to grow by 251 per cent 551 billion in 2021 courtesy of the rising demand for mobile phones information and communications technology ict infrastructure personal computers industrial applications consumer electronics and automobiles the buoyant demand for electronic gadgets cloud computing solutions and auto industry following covid19 pandemic led to a huge supplydemand mismatch in the semiconductor industry causing production delays and inflationary pressures across segments forcing companies to reinvent their supply chains it read advt on an encouraging note the report said that schemes such as pli scheme for sunrise sectors district as export hub deh covering one district one product odop and ubhartesitaare scheme for msmes should help in achieving the target of 400 billion set for 202122 and improve export competitiveness it also said that the pli scheme and scheme for promotion of manufacturing of electronic components and semiconductors specs will encourage its domestic production of electronic goods incentives in line with those provided by major countries would help develop semiconductor fabrication facilities in india fiscal incentives and provision of adequate infrastructure like uninterrupted supply of electricity and ultrapure water could contribute to indias emergence as a major player in this industry and provide a conducive environment for the hardware segment to complement the software industry it read meanwhile the trade deficit jumped from 234 billion to 555 billion in aprilaugust 2021 yearonyear still the number remained below its precovid level 772 billion service sector also saw a record growth in exports with its q1