India's Trade Deficit Widens To A Record High In July
India's trade deficit widened in June as imports surged and exports fell.
The trade deficit rose to a record high of $31.02 billion in July compared with $25.6 billion in June, according to preliminary data by the Ministry of Commerce and Industry on Monday.
Exports fell 0.76% year-on-year to $35.24 billion. On a month-on-month basis, exports fell by 12.2%.
Imports rose 43.6% year-on-year to $66.3 billion. On a month-on-month basis, imports fell by 0.1%.
Contrary to expectations, the merchandise trade deficit widened further, with a sequential decline in exports and flattish imports, Aditi Nayar, chief economist at ICRA Ltd., said.
Worryingly, merchandise imports were almost twice as high as merchandise exports in July 2022. The current account deficit is likely to have crossed $30 billion in Q1 FY23, a fallout of the higher commodity prices, equivalent to around 80% of the full year figure for FY22.Aditi Nayar, Chief Economist, ICRA
On an annual basis, exports dipped, while imports recorded a sharp rise in July 2022 on the back of higher commodity prices, Nayar said, adding that the increase in imports was led by petroleum products and coal, negating the relief offered by a decline in gold imports.
Non-petroleum and non-gems and jewellery exports in July were at $26.5 billion, a growth of 1.2% year-on-year.
Non-petroleum, non-gems and jewellery imports were at $38.4 billion, a growth of 42.9% year-on-year.
Key Export Items
Engineering goods exports stood at $9.3 billion, down 2.5% year-on-year.
Petroleum product exports were at $5.4 billion, 7.1% higher than a year earlier.
Gems and jewellery exports were at $3.3 billion, 5.2% lower than a year ago.
Organic and inorganic chemical exports were at $2.6 billion, 7.9% higher than last year.
Drugs and pharmaceutical exports were at $2.1 billion, 1.4% lower over a year earlier.
Key Import Items
Petroleum, crude and product imports were up 70.4% over a year ago at $21.1 billion.
Imports of coal, coke and briquettes were 164.4% higher than a year ago at $5.2 billion.
Electronic goods imports were at $6.8 billion, up 27.8% over a year earlier.
Machinery, electrical and non-electrical goods were at $3.8 billion, up 35.1% over a year ago.
Gold imports stood at $2.4 billion, 43.6% lower than a year ago.