Merchandise trade deficit widens to $20.98 bn in June

Vijay C Roy

Chandigarh, July 15

Driven largely by a surge in imports, India’s merchandise trade deficit widens to $20.98 billion in June 2024 compared to $19.19 billion in June 2023. Rising trade deficit means the country is importing more than the exports.

In June 2024, while merchandise exports rose 2.6 per cent on year-on-year to $35.2 billion whereas merchandise imports increased by 4.9 per cent to $56.18 billion. Merchandise exports and imports stood at $34.32 billion and $53.51 billion in June 2023, respectively.

The top importing countries were the UAE, China, Russia, Indonesia and the USA. Also, non-petroleum, non-gems & jewellery (gold, silver & precious metals) imports in June 2024 were $36.04 billion compared to $ 33.66 billion in June 2023.

As far exports is concerned, the jump in exports was driven by increase in demand for coffee (70.02%), iron Ore (24.66%), electronic goods (16.91%), cereal preparations & miscellaneous processed items (15.43%), engineering goods (10.27%), drugs & pharmaceuticals (9.93%) and spices (9.84%).

During June this year, services exports stood at $30.27 billion, up from $27.29 billion in June of the previous year. Services imports rose to $17.29 billion from $15.61 billion in June 2023. Commerce Secretary Sunil Barthwal said in April-June, exports were $200.33 billion (goods and services) and if the trend continues, then trade will cross $800 billion trade this year.

Last month, Union Commerce and Industry Minister Piyush Goyal had also said that exports of goods and services from India are expected to cross $800 billion by the end of the current financial year despite external headwinds. In May, merchandise exports rose by 9.1 per cent to $38.13 billion, despite the trade deficit widening to $23.78 billion, the highest in seven months, according to government data.

According to exporters, the Indian exports have been affected by a slowdown in global growth coupled with geopolitical challenges, including conflicts in West Asia and Ukraine, as well as the Red Sea crisis, have also impacted global trade.