India’s Trade Deficit Widens to $23.5B in July

Chennai: India's trade deficit widened to $23.50 billion in July as exports dipped 1.4 per cent and imports grew 7.5 per cent. However, combined exports of merchandise and services registered a growth of 2.8 per cent and the ministry expects this year’s combined exports to be higher than last year’s.

Merchandise exports in July this year dipped by 1.4 per cent year-on-year to $33.98 billion while imports rose by 7.5 per cent to $57.48 billion. Merchandise exports and imports stood at $34.39 billion and $53.49 billion in June 2023, respectively.

This saw the trade deficit increase to $23.50 billion in July from $19 billion in the same month last year and $20.98 billion in June.

Electronic goods shipments increased by 37.31 per cent and remained one of the major contributors of export revenues apart from engineering goods that grew 3.66 per cent and pharmaceuticals which rose 8.36 per cent. Meat, dairy and poultry products, tobacco, oil meals and tea saw double-digit growth.

In the import basket, crude oil was the main contributor to the increase in inbound shipment. Non-petroleum imports stood at $43.61 billion in July against $41.67 billion in the same month last year.

“A widening in the oil as well as non-oil deficit, expanded the merchandise trade deficit in July 2024 relative to July 2023. The higher oil import bill reflects higher volumes and global prices, as well as a possible decline in discounts,” said Aditi Nayar, chief economist, ICRA.

Services export for July 2024 was $28.43 billion, compared to $26.22 billion in the year-ago month, while imports too were up $14.55 billion against $13.74 billion in July 2023. Combined exports of merchandise and services posted a positive growth of 2.81 per cent, while combined imports was up by 7.14 per cent.

The Commerce Ministry said that going by the current trend, the country's total exports of goods and services will be higher than last year's figure.

Merchandise and services exports for April-July are up by 6 per cent. Both merchandise exports and imports for the April-July period are higher than last year.