Image used for representational purposes only.
Image used for representational purposes only.

May trade deficit widens to seven-month high at USD 23.78 billion

Goods exports grew 9.1% to $38.2 bn, import rose 7.7% to $61.9 bn; in April-May, exports up 5.1% at $73.12 bn, imports rose 8.89% to $116 bn

NEW DELHI: The country’s goods exports grew 9.1% to $38.13 billion in May, with double-digit growth witnessed in several sectors including engineering goods, electronics, drugs and pharmaceutical products, the government data showed on Friday.

Imports surged by 7.7% to $61.91 billion, with merchandise trade deficit widening to a 7-month high of $23.78 billion. The trade deficit was also 5.5% higher than a year-ago period. Commerce Secretary Sunil Barthwal while briefing the media highlighted a more optimistic outlook for trade this year. He said even the sectors like textiles saw a healthy growth of 9.8% after a period of sluggish growth.

“With the inflationary pressures coming down in advanced countries, there will be demand for imports. It’s a positive trend that will continue,” Barthwal said. As per official data, petroleum products exports grew by 15.75% year-on-year (YoY) to $6.78 billion in May 2024, engineering goods surged by 7.39% to $9.99 billion, electronic goods by 22.97% to $2.97 billion, and drugs and pharmaceuticals exports saw YoY growth of10.45% to $2.30 billion.

Crude oil imports grew by 28% to $20 billion in May. On the other hand, gold imports declined slightly to $3.33 billion in May this year from $3.69 billion in the corresponding month of FY24.

For the period of April-May this fiscal year, exports increased by 5.1% to reach $73.12 billion, while imports rose by 8.89% to $116 billion, as per the data. Commerce secretary Sunil Barthwal said that India’s higher economic growth compared to the global average is driving up domestic demand for imports and reducing the exportable surplus, which is a contributing factor to the widening trade gap. He added that widening trade deficit is not a concern considering foreign direct investment (FDI) and foreign exchange inflows. He also highlighted the impressive growth in devices exports.

The New Indian Express