India's Trade Deficit Rises To $9.4 Billion In June

Gantry cranes stand at the Jawaharlal Nehru Port, operated by Jawaharlal Nehru Port Trust (JNPT), in Navi Mumbai, Maharashtra, India, on Monday, March 30, 2020. Photographer: Dhiraj Singh/Bloomberg

India's Trade Deficit Rises To $9.4 Billion In June

India’s foreign trade continued to normalise in June amid a pick-up in imports.

Merchandise trade deficit widened to $9.4 billion last month from $6.3 billion in May, according to data released by the Ministry of Commerce and Industry on Thursday.

  • Merchandise exports rose by 0.7% month-on-month to $32.5 billion.

  • Merchandise imports rose 8.6% to $41.8 billion.

  • On an annual basis, exports rose 48.3% and imports increased 41.9%, led by a low base.

  • Non-petroleum and non-gems and jewellery exports rose 7% month-on-month to $25.7 billion in June.

  • Non-oil and non-gold imports rose 6.4% month-on-month to $30.2 billion in June.

In line with the sequential recovery displayed by most high frequency indicators, non-oil non-gold imports rose in June 2021, reflecting a pickup in demand with the gradual unlocking as well as the high commodity prices, said Aditi Nayar, chief economist at ICRA. The sharp increase in non oil exports is encouraging, reflecting both the vaccine driven revival in activity in many trading partners, as well as the higher prices of commodity exports, she said.

With surging exports and relatively subdued gold imports in May-June 2021 dampening aggregate trade deficit to a three-quarter low of $31 billion in Q1 FY22, the current account is expected to revert to a small surplus in that quarter, according to Nayar.

Key Exports (Month-On-Month):

  • Gems and jewellery contracted 6.7% to $2.8 billion.

  • Drugs and pharmaceuticals rose 5.3% to $2 billion.

  • Organic and inorganic chemicals rose 22.7% to $2.7 billion.

  • Engineering goods rose 8.1% to $9.3 billion.

  • Electronic goods dropped 5.3% to $1 billion.

  • Ready-made garments of all textiles fell 9.1% to $1 billion.

  • Petroleum products contracted 24.5% to $4 billion.

Key Imports (Month-On-Month):

  • Coal, coke and briquettes fell 5% to $1.9 billion.

  • Petroleum and crude oil products increased 12.6% to $10.7 billion.

  • Organic and inorganic chemicals rose 6.4% to $2.2 billion.

  • Pearls, precious and semi-precious stones contracted 18.2% to $2.6 billion.

  • Iron and steel imports reduced by 25% to $1.5 billion.

  • Non-ferrous metal imports fell 15.4% to $1.5 billion.

  • Transport equipment remained constant at $1.2 billion.

  • Electronic goods rose 9.5% to $4.6 billion.

  • Gold imports rose 43% to $1 billion.

Services Trade

Meanwhile, services exports rose to $17.4 billion, while imports were at 10.3 billion. As such, India’s overall exports were at $49.9 billion while imports stood at 52.2 billion.

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