NEW DELHI: The country’s merchandise exports in June fell drastically by 22% to $32.97 billion on account of a global slowdown. It stood at $42.28 billion in the same month a year ago. Meanwhile, imports dropped by over 17% in June to $53.1 billion with merchandise trade deficit narrowed to $20 billion in June as against $22 billion in May.
Overall, the trade deficit improved by 28.26% during April-June 2023 to $ 22.59 billion from $ 31.49 billion a year-ago period, the data revealed. Merchandise imports also narrowed in the first quarter of FY24 to $57.6 billion from $62.56 billion a year ago.
As per Commerce Secretary Sunil Barthwal, the trade sector is completely in the hands of global factors and how the world grows. He said that the World Trade Organisation (WTO) had predicted that there will be a slowdown and that forecast is coming true.
Exports and imports have fallen because of slowdown in major economies like America, North America and the whole of Europe along with several measures taken by the countries to counter inflationary pressure.
As per the data, significant decline in exports was noticed in textiles, petroleum products, chemicals, gems and jewellery, leather and leather products, rice and other cereals among others. However, 9 of the 30 key sectors exhibited positive growth in June 2023 as compared to the same period last year and these include iron ore, electronic goods, oil seeds, cashew, tobacco, fruits & vegetables, coffee, handicrafts and drugs & pharmaceuticals etc.
“Exports of electronic goods rose 45.36% during June 2023 to $2.43 billion as against $1.67 billion in June 2022. During April-June 2023 electronic goods exports were recorded at $6.96 billion as compared to $4.73 billion during April-June 2022, registering a growth of 47.05%,” the Commerce Ministry said.
The lower deficit has been driven by a larger sequential fall in imports than exports, says Madhavi Arora, lead economist with Emkay Global Financial Services.
However, she added that the deficit remains manageable, and she predicted the CAD/GDP easing to 1.4% in FY24 from 2.0% in FY23. Arora, however, pointed out that gold imports need to be watched, as they have surged again (highest monthly imports since May’22), ahead of the festive season - though the government’s restrictions on certain gold imports may help moderate inward shipments.
