India’s trade deficit widens YoY to $23.50 bn in July; exports down 1.4%

Merchandise exports in July this year dipped by 1.4 per cent year-on-year to $33.98 billion, while imports increased by 7.5 per cent to $57.48 billion as against $53.49 billion in July 2023.

Economists had expected the country’s July trade deficit to be $21.35 billion, according to a Reuters poll.

Earlier, in June, merchandise exports rose by 2.6 per cent year-on-year to $35.2 billion while imports rose by 5 per cent to $56.18 billion. Merchandise exports and imports stood at $34.32 billion and $53.51 billion in the same month, respectively.

India registered a current account surplus of $5.7 billion, equivalent to 0.6 per cent of GDP, in the March quarter, marking the first surplus in ten quarters. In the year-ago period, a deficit of USD 1.3 billion (0.2 per cent of GDP) was recorded, while the previous quarter saw a deficit of USD 8.7 billion (1 per cent of GDP).

Improvement in the current account balance is attributed to several factors, including a narrowing merchandise trade deficit, an increased services trade surplus, and a rise in remittances.Commerce Minister Piyush Goyal recently expressed confidence in India’s goods and services exports crossing $800 billion this fiscal despite global challenges.