India’s merchandise exports grew 30.7% year-on-year to $40.19 billion in April, the commerce ministry said on Friday, up $2 billion from estimates released earlier this month.
Goods imports during the month were also $2 billion higher than the earlier estimate, showing a growth of 31%. The trade deficit in April is slightly higher than previous estimates at $20.11 billion and exceeds March’s deficit of $18.5 billion.
Rating agency ICRA expects the trade trade deficit to hit an all-time high of $250-255 billion in 2022-23, as export growth along with global trade flows will slow to around 9% during the year. On the other hand, imports are expected to grow by around 16%, as the growth in domestic demand is expected to exceed external demand.
The growth in exports was led by petroleum products (up 127.69%), electronic goods (71.69%), cereals (60.83%), coffee (59.38%), processed food (38.82%) and leather products (36.68%). Record goods exports for April, the ministry said.
The growth rate was lower at 19.9%, excluding petroleum and gems and jewelery exports, with outbound shipments at $28.46 billion. In contrast, imports excluding these categories rose sharply to $35.7 billion, up 34.4% from a year ago.
Coal and petroleum imports were higher than earlier estimates – the former rose 146.3% to $4.93 billion and the latter jumped 87.5% to nearly $20.2 billion. The value of fertilizer imports nearly tripled to $1.2 billion from $376 million in April 2021. The increase in these three import categories reflects a sharp increase in global prices.
“While imports and exports displayed a similar sharp expansion, the trade trade deficit widened to $20.1 billion in April 2022 from $15.3 billion in April 2021, driven by oil. Rating agency ICRA’s Chief Economist Aditi Nair said overall merchandise imports topped $60 billion for the second consecutive month, given the rise in commodity prices following the Russia-Ukraine conflict.
While gold imports fell 72.3% to just $1.7 billion from $6.2 billion in April 2021, silver imports grew nearly tenfold, from a low of $11.90 million a year ago to $109.5 million in April 2022 .
Ms Nair expected the rupee to trend down and trade between $75 to $79 by September 2022. The current account deficit, combined with tight monetary policy around the world and aversion to emerging market assets, will add to the pressure. Rupee. However, India’s large forex reserves and foreign investors coming in from the debt market will likely include further depreciation from the recent record lows, she said.