Export Rise Marginally by $1bn in June but Imports Up by $3bn Compared to Previous Month

Among high-value segments, the rise in exports in June was led by petroleum products (119%), followed by electronics (61%) and garments (50%) compared to a year ago.

Merchandise exports rose 23.5% in June from a year before even on an elevated global commodity prices drove up trade deficit to a new monthly record of $26.2 billion.

With this, trade deficit in the June quarter jumped to a record $70.8 billion, way above that of $31.4 billion in the same quarter last fiscal, according to the provisional data released by the commerce ministry on Thursday.

Exports increased to $40.1 billion in June, a record for the third month of any fiscal, and the growth is slightly higher than May’s 20.6%. Core exports grew 8.7% in June, against 8.6% in the previous month but well below 19.9% in April.

But imports spiked to $66.3 billion from $42.1 billion a year before, driven by a 99% jump in purchases of oil and petroleum products, 261% in coal and 183% in gold.

A spurt in prices inflated petroleum and coal import bill substantially, while massive gold imports were partly driven by jewellers’ bid to build inventory to cater for some pent-up demand. This is partly because many marriages were last year postponed to 2022 due to the pandemic, as pointed out in the finance ministry’s economic report for June. Fitch Ratings has already warned of a doubling of India’s CAD in FY23 to about 3.1% of GDP. Of course, senior government officials have assuaged concerns about financing the CAD.

Among high-value segments, the rise in exports in June was led by petroleum products (119%), followed by electronics (61%) and garments (50%).