NEW DELHI: The merchandise trade deficit widened to a five-month high of $22.12 billion in May as goods exports declined 10.3% year-on-year to $34.98 billion, the government data showed. This is the fourth straight month when exports contracted on account of a global slowdown. Meanwhile, imports also witnessed a dip by 6.6% year-on-year (YoY) to $57.1 billion in May on account of a decline in the purchase of gems and jewellery, chemicals, cotton and vegetable oil, the data revealed.
Sequentially, the merchandise exports rose marginally, as they stood at $34.6 billion in April, while imports registered a rise of around 14% in May, as imports in April were recorded at $49.9 billion. In April, the merchandise trade deficit was $15.24 billion.
“India’s trade performance, after witnessing very strong growth in 2022-23 has shown declining trends as compared to the high base of last year as the pace of growth in global merchandise exports moderated significantly in 2023, as persisting geopolitical tensions and monetary tightening induced recessionary fears have led to a decline in consumer spending across advanced nations,” Commerce Ministry said in a statement.
“Trade deficit has come down significantly. The total trade deficit is down by 35.41% in the first two months (April and May) of the current year,” Sunil Barthwal, Commerce Secretary said while briefing the media on trade data. He also said that the Centre is working on a focused export strategy to give impetus to export growth and in this regard it is focusing on 40 countries. He also expressed hope that the slowdown condition may improve going forward and the demand would pick up.
While services exports stood at $25.30 billion, imports were estimated at $13.53 billion in May, as per the Government. Services imports contracted to $13.53 billion, around 11% down from $15.20 billion in
“Services exports are looking positive. We are not worried about facing a slowdown there,” Barthwal said.
The overall trade deficit (goods and services) narrowed to $10.35 billion in May as against $12.20 billion in the corresponding month of the last year.
Meanwhile, Barthwal also said that the trade data should be seen from the point of view of financial years instead of looking at it on a sequential basis as that gives a better perspective of the trade trends.