Fugitive gold, coal purchases drive imports up, exports up 23.5% to $40.1 bn . Hui
Fugitive gold, coal purchases drive imports up, exports up 23.5% to $40.1 bn . Hui
India’s trade trade deficit widened to $26.18 billion in June, higher than the government’s earlier estimate of $25.63 billion, after the commerce ministry revised both exports and imports data for the month.
While exports of goods rose 23.5% year-on-year to more than $40.1 billion (initial estimate $38 billion) in June, imports rose 57.5% to $66.3 billion due to higher purchases of coal, gold and petroleum products.
The previous record monthly trading trade deficit was $24.3 billion in May. Last month’s trade deficit was almost three times the $9.6 billion shortfall recorded in June 2021.
As predicted earlier, the import boom was driven by coal, gold and petroleum products, but there were significant upward revisions for each. Coal imports nearly quadrupled to $6.76 billion, while gold imports nearly tripled to $2.7 billion. Petroleum imports climbed 99.5% to $21.3 billion.
Excluding petroleum and gems and jewellery, imports grew 38.3% to $38.53 billion in June. Exclusion of similar product categories from export data meant that exports of other products increased by a single digit of 8.65% to nearly $28 billion.
In the export basket, engineering goods and drugs and pharmaceuticals, which were earlier estimated to decline, actually registered a growth of 3% and 4.8%, respectively, in shipments.
Petroleum exports rose 119% to $8.6 billion, while electronic goods exports rose 60.7% to $1.67 billion. Rice exports crossed the $1 billion mark by 43 per cent, while the employment-intensive readymade garment sector registered a 50 per cent growth in exports. Cotton yarn and handloom products as well as plastic and linoleum, which form India’s top 10 export items, contracted 19.5% and 20%, respectively.
Thus, goods exports grew by 24.5% to $118.96 billion in the first quarter of 2022-23, while imports grew by 49.5% to $189.76 billion. The trade deficit widened to $70.8 billion for the quarter.
Aditi Nair, Chief Economist, ICRA said, “Revised trade trade deficit for June 2022 poses some upside risk to the current account deficit for Q1… Correction in commodity prices softened the outlook for the current quarter. Is.”
However, he cautioned that a slowdown in export growth could come amid a weak outlook for the global economy. “We expect a marginal decline in our current account deficit estimate of $105 billion or 3% of GDP this year,” he said.