Exports Hit A Record; Trade Deficit Widens To Three-Month High In July
India’s trade deficit continued to widen in July as imports jumped to the highest level of this fiscal, while exports rose to a record.
Trade deficit widened to $11.23 billion in July from $9.37 billion in June, according to data released by the government on Monday. That's the highest in three months.
Merchandise exports rose 8.2% month-on-month to $35.17 billion.
Merchandise imports increased 10.8% to $46.4 billion.
On an annual basis, exports rose 47.9% and imports increased 59.4% on a low base.
India’s exports rose for the fourth straight month in July, and are expected to help buoy the economy.
Non-petroleum and non-gems and jewellery exports rose 1.75% month-on-month to $26.1 billion. The rise in exports was led by petroleum products, engineering goods and gems and jewellery.
"While the non-oil exports were robust in July 2021, they remained below the March 2021 level," said Aditi Nayar, chief India economist at ICRA.
The rise in imports was led by petroleum and crude products, along with gold, pearls, precious and semi-precious stones.
Gold imports surged in July with the phased reopening of the economy, Nayar said. Inbound shipments have already crossed $12 billion in the first four months of this fiscal, and appear set to surpass last year's level of $34.6 billion, with a pickup likely in the festive period, she said.
With a robust services trade surplus in June, in addition to the state lockdown-compressed merchandise trade deficit, ICRA estimates a current account surplus of $2-3 billion for the quarter ended June.