New Delhi
India’s merchandise exports fell by 1.5% year-on-year in July, reaching $33.9 billion, according to a recent report by Crisil Ratings. The decline is attributed to weaker exports in oil, gems, and jewellery. Domestic demand for oil products increased, leading to higher imports and a reduction in exports.
Despite the July downturn, Crisil maintains a positive outlook, noting that the fiscal year began with strong export growth in the first quarter. The government’s focus on foreign trade agreements is expected to boost exports in the future.
The core export sector saw a 5.7% increase in July, although this was below the 8.7% average growth recorded in the previous two months. Growth was notable in sectors such as electronic goods (37.3%), meat, dairy, and poultry (56.2%), oil meals (22%), ready-made garments (11.8%), spices (13%), and tea (21.8%). However, gems and jewellery exports dropped by 20.4%, ceramics and glassware by 21.1%, organic and inorganic chemicals by 12%, and rice by 15.3%.
Imports rose by 7.5% year-on-year in July, reaching $57.48 billion, with oil imports making up $13.87 billion or 24.1% of the total. This increase in imports, coupled with stagnant export growth, widened the trade deficit to $23.5 billion, the highest monthly deficit in nine months.
Overall, merchandise exports grew by 4.15% to $144.12 billion for April-July, but imports surged 7.6% to $229.7 billion, widening the trade deficit to $85.6 billion. Services exports also weakened, though a decline in services imports led to a higher services trade surplus of $14.4 billion in June.
