Exports up 2.25 percent in July; trade deficit narrows to a four-month low

According to government data on Wednesday, India’s exports growth showed positive in July, it increased by 2.25 percent, while trade deficit reduced to a four-month low of USD 13.43 billion.

Exports increased to USD 26.33 billion in July as against USD 25.75 billion in the same month last year.

The reduction in the overall imports, including gold and oil, led to the narrowing of the trade deficit, the difference between exports and imports.

The trade deficit in July 2018 was at USD 18.63 billion. The previous low was in March 2019, when this gap was at USD 10.98 billion.

Gold imports declined 42.2 percent to USD 1.71 billion in the month of July. Oil imports fell 22.15 percent to USD 9.6 million, while non-oil slipped by 5.92 percent to USD 30.16 billion.

Export sectors demonstrated positive growth in the previous month. This includes chemical, electronics, iron ore, marine products, and pharmaceuticals.

However, some sectors of the shipment showed negative growth, including gems and jewellery (-6.82%), engineering goods (-1.69%) and petroleum products (-5%) according to the data.

Cumulatively, from April to July 2019, exports dipped 0.37 percent to USD 107.41 billion, while imports contracted by 3.36 percent to USD 166.8 billion.

Trade deficit during the four-month period narrowed to USD 59.39 billion in comparison to USD 65.27 billion during the same period in the last fiscal year.

Oil imports in April to July 2019-20 were at USD 44.45 billion, which was 5.69 percent lower as compared to USD 47.13 billion during the same period in the last year.

Federation of Indian Export Organisations while commenting on the data said;

“The sluggish global demand and uncertainties emanating from tariff wars are clearly visible in the slowdown in exports across the globe.”

FIEO President Sharad Kumar said:

“Domestic issues including access to credit, cost of credit especially for merchant exporters, interest equalization support to all Agri exports, benefits on sales to foreign tourists and quick refund of GST should be seriously looked into.”

Single said:

“Since the consumption rates in India have plummeted, demand has been squeezed, especially for precious stones and electronic goods.”

India’s exports growth entered the negative zone after a gap of eight months in June, recording a decline of 9.71 percent amid global headwinds.

The World Bank in its Global Economic Prospects has projected weakening of Global trade in 2019.

Source