India's Trade Deficit Narrows To $20.1 Billion In June As Exports, Imports Decline
Merchandise exports fell 22%, while imports declined 17.5% as compared with the previous year.
India's trade deficit narrowed in June, as both exports and imports declined amid a slowdown in major world economies.
The merchandise trade deficit narrowed to $20.1 billion in June from $22.1 billion in May, according to a press briefing held by the Ministry of Commerce and Industry.
Merchandise exports fell by 22% year-on-year to $33 billion in June 2023.
Merchandise imports declined by 17.5% year-on-year to $53.1 billion.
On a monthly basis, exports fell by 5.7%, while imports declined by 7%.
"The merchandise trade deficit in June 2023 exceeded our forecast with a sharp sequential uptick in gold imports, which offset half of the compression in the net oil deficit," said Aditi Nayar, chief economist at ICRA.
Most of the subgroups of exports reported a contraction in June on an annual basis, reflecting an unpalatable combination of lower demand and commodity prices, said Nayar.
In absolute terms, petroleum products accounted for half of the fall in exports in June relative to June 2022, she said. The key outlier was electronic goods, with a robust 45% expansion in exports in June this year.
Current account deficit will widen sequentially to $11-13 billion in Q1, on the back of a wider merchandise trade deficit and smaller services surplus, according to Nayar's estimates.
Exports of non-petroleum, non-gems and jewellery items—like gold, silver and precious metals—in June were $25.13 billion, while figures for the same month a year ago was $28.15 billion.
Non-petroleum, non-gems and jewellery items—like gold, silver and precious metals—imported in June totalled $33.28 billion, while during the same period last year they stood at $38.93 billion.
Key Export Items
Exports of engineering goods stood at $8.5 billion, down 11% year-on-year.
Petroleum product exports were at $5.6 billion, 47.5% lower than a year earlier.
Gems and jewellery exports were at $2.3 billion, 35.6% lower on an annual basis.
Organic and inorganic chemical exports were at $2.2 billion, 26.7% lower on an annual basis.
Drugs and pharmaceutical exports were at $2.2 billion, 5.1% higher from over a year earlier..
Key Import Items
Petroleum, crude, and product imports were down 33.8% over a year earlier at $12.5 billion.
Organic and inorganic chemical imports were at $2.5 billion, 30.5% lower on an annual basis.
Imports of coal, coke, and briquettes were 47.6% lower than a year ago at $3.5 billion.
Imports of electronic goods were at $6.6 billion, 8.5% higher over a year earlier.
Machinery, electrical and non-electrical goods were at $3.7 billion, up 2.2% over a year ago.
Gold imports stood at $5 billion, 82.4% lower than a year ago.
Services trade was largely flat on an annual basis, with exports at $27.1 billion and imports at $15.9 billion. As such, the overall trade deficit in June came in at $8.9 billion, down from $10.4 billion last month and $10.9 billion a year ago.
