India's trade gap swells to $23.5B: What's behind this worry
India's trade deficit has widened to $23.5 billion in July this year, marking a significant increase from the previous year's figure of $19 billion, according to data released by the Commerce Ministry. This rise was primarily driven by a decrease in merchandise exports and an upsurge in imports. The country's merchandise exports experienced a 1.4% year-on-year decline, settling at $33.98 billion for July 2024. In June 2024, the trade gap stood at $20.98 billion.
Imports rise in July, contributing to trade deficit
Imports saw a year-on-year increase of 7.5%, reaching $57.48 billion in July this year compared to $53.49 billion during the same period last year. This surge in imports has contributed significantly to the widening trade deficit. The figures contrast with June's data when exports had seen a modest rise of 2.6% year-on-year, amounting to $35.2 billion while imports also increased by 5% to $56.18 billion.
'Crude oil prices are impacting exports'
"Our exports are holding on despite what is happening globally, reflected in substantial increase in engineering and electronics good exports," said Trade Secretary Sunil Barthwal. "Monthly fluctuations in exports are largely impacted by crude oil prices."
India's trade deficit exceeds economists' predictions
The actual trade deficit for July has surpassed the expectations of economists who had predicted it to be around $21.35 billion, according to a Reuters poll. This indicates a more significant imbalance between the country's imports and exports than initially anticipated. Despite global challenges, Commerce Minister Piyush Goyal has expressed confidence that India's goods and services exports will cross $800 billion this fiscal year.
