India’s merchandise exports grew for the third straight month in June, rising 2.55% to $35.2 billion, but the import bill climbed by a faster 5% to $56.2 billion, widening the trade deficit by 9.4% from a year ago, as per quick trade estimates released by the Commerce Ministry
Noting that global growth is looking up and inflation is trending down, if growth impulses sustain, India could well cross $800 billion of total exports this year (record high of $200.3 billion in the first quarter of 2024-25)
Total exports stood at a record high of $778.2 billion in 2023-24, 0.42% over the previous year.
The major growth drivers were engineering and electronics goods, up 10.3% and 16.9%, respectively, as well as drugs and pharmaceuticals (9.9%), chemicals (3.3%), and coffee (up 70%)
Worryingly, petroleum exports slumped 18.3% in June to $5.5 billion, while imports rose 19.6% to $15.05 billion
Another 10 of India’s top 30 export items clocked a decline in shipment values, including the labour-intensive sectors of handicrafts (-16.6%), jute (-11.1%), marine products (-7.7%) leather (-2.2%) and gems and jewellery (-1.4%)
On the imports front, the value of gold shipped in fell 38.7% year-on-year to $3.06 billion, but silver imports jumped 377.4% to $210.7 million.
Electronics goods imports rose 16% to $7.6 billion, while pulses imports were up 69.1%.
For the first quarter, the merchandise trade deficit has expanded to $62.3 billion from $56.2 billion a year ago.
This is likely to push up India’s current account deficit to about 1.4% of GDP from 1% in the same quarter a year ago
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