India June Merchandise Exports Rise To 40.4 Billion Dollars As Trade Deficit Widens

India’s merchandise exports rose by 14.35 percent year-on-year to $40.4 billion in June, according to trade data reported from Chennai. However, a sharp 31 percent surge in imports to $70.8 billion during the same period pushed the country's monthly trade deficit to $30.4 billion.

Despite the year-on-year growth, June's merchandise exports saw a sequential decline from the $45.20 billion recorded in May. Meanwhile, the $70.8 billion import figure for the month was a significant increase from the $54.08 billion recorded in June of the previous year. This pushed the trade deficit up to $30.4 billion, compared to $19.1 billion in the same month last year and $28.2 billion in May.

Several key sectors drove the export growth during the month. Engineering goods exports grew by 20.74 percent to $11.4 billion, while electronic goods rose by 18.93 percent to $4.9 billion. Other performing sectors included gems and jewellery, which increased by 34.64 percent to $2.4 billion, organic and inorganic chemicals at $2.7 billion (up 19.42 percent), petroleum products at $4.8 billion (up 9.19 percent), and rice at $1 billion (up 16.48 percent).

Pankaj Chadha, Chairman of EEPC India, attributed the double-digit export growth to strategic trade measures. Chadha stated that key factors contributing to the growth included free trade pacts with partner countries, exporters' product and market diversification strategies, and the rising competitiveness of Brand India products. Key countries registering strong growth in purchases from India included Singapore, China, Malaysia, Tanzania, Vietnam, and South Africa.

On the import side, elevated commodity prices played a major role in expanding the bill. Aditi Nayar, chief economist at ICRA, noted that the uptick in imports was largely broad-based. Nayar stated that select items such as oil, electronics, fertilisers, and chemicals witnessed a sizeable expansion during the month.

For the April-June quarter, India’s total exports reached a new high of $232.73 billion, representing an 11.37 percent growth. Total imports for the same quarter stood at $270.15 billion, registering a growth of 17.55 percent.