NEW DELHI: India’s trade balance resumed its long-term trend of posting a deficit in July, at $4.8 billion, after it had recorded a rare surplus of $790 million during the previous month. The surplus was the first India had seen in almost two decades, driven by a sharp fall in imports due to general demand destruction.
However, July figures show the surplus may have been a one-off.
Data released by the commerce ministry on Friday shows that shift back to a deficit in July was driven by a sequential rise in imports as demand normalised, even as exports did better, falling by a lower 10.2 per cent. According to the ministry, imports dipped 28.4 per cent in July year-on-year as against 47.59 per cent in the previous month.
Among the 30 major items, imports of only fruits and vegetables (2.95%), pharmaceuticals (22%), project goods (79.9%), fertilisers (7.8%) and gold (4.2%) turned positive. Oil imports declined by 31.97 per cent to $6.53 billion. Within exports, 16 out of 30 major items were in the positive territory.
The better performance of exports was led by a growth in exports of engineering goods (8.5%), pharmaceuticals (19.5%), iron ore (39.6%), rice (48%) and cotton yarn (7.4%). However, a sharp contraction was seen in exports of petroleum items (51.5%), gems and jewellery (49.6%), leather (27%), marine (20%) and readymade garments (22.1%).
“Resumption of business activities across the country and order enquiries from almost all major economies like US, EU, Canada, Japan, South Korea, Australia and New Zealand which has helped in bringing the exports sector to almost 90% of the level in July 2019,” said FIEO President Sharad Kumar Saraf.
However, global trade forecasts remain gloomy, which the industry saying there is an urgent need for a special revival package for exports.
Imports show marginal improvement
Among the 30 major items, imports of only fruits and vegetables (2.95%), pharmaceuticals (22%), project goods (79.9%), fertilisers (7.8%) and gold (4.2%) turned positive. Oil imports declined by 31.97%.
Exports saw engineering goods (8.5%), pharma (19.5%), iron ore (39.6%), rice (48%) and cotton yarn (7.4%) all grow in July.