NEW DELHI: Merchandise exports fell by 9.3% to USD 34.71 billion in August as petroleum exports plummeted by a staggering 37.56%. India’s goods trade deficit also rose to a high of USD 30 billion during the month as compared to USD 23 billion in July.
Meanwhile, import widened by 3.3% to all-time high of USD 64.36 billion on doubling in gold imports to USD 10.1 billion.
As per commerce secretary Sunil Barthwal, the expansion in trade deficit is not a big problem for a developing economy that is growing at a quick pace. He said as long as there are no issues with foreign exchange, trade deficit shouldn’t be a concern. Oil imports fell by 32.4%, to USD 11 billion, while import of petroleum products saw an even bigger drop of 37.6%, falling to under USD 6 billion.
Exports of gems and jewellery fell by 23.1%, coming under USD 2 billion. The secretary explained that the drop in oil prices, which fell by USD 6, was a major factor behind fall in petroleum exports. He said the gems and jewellery sector has been affected by sanctions from the G7 countries after the Russia-Ukraine conflict, making it harder to obtain rough diamonds.
“...However, the performance of our exports beyond gems and jewellery and petroleum, gives us comfort,” he said. Barthwal added that despite clouds of uncertainty hovering globally, India is still a bright spot.
Global Trade Research Initiative (GTRI) said, “If we exclude petroleum from equation, goods exports for August show a rise of 0.05% against August 2023. Crude oil and petroleum import fell 32.38% in August 2024, mainly due to decreased demand from Indian refineries.”
“We must prepare for challenging times ahead, mainly for high-volume, low-value goods like low end enginerring products, textiles, garment and other labour intensive products, as rising freight costs linked to longer shipping routes are likely to exacerbate the situation,” it added.
‘Trade deficit is not big problem’
As per commerce secretary Sunil Barthwal, expansion in trade deficit is not a big problem for a developing economy that is growing at a quick pace, as long as there are no foreign exchange issues.
Oil imports fall by 32.4%, to $11 billion
Oil imports fell by 32.4%, to USD 11 bn, import of petroleum products saw even bigger drop of 37.6% to under USD 6 bn. Exports of gems and jewellery fell by 23.1%, coming under USD 2 bn