Trade deficit narrows to $7.7 billion despite nearly 7% decline in exports

The trade deficit for the month of July 2016 has declined to $7.76 billion (Rs 52,162.54 crore) in as compared to $13.09 billion (Rs 83,303.73 crore) in July 2015, a 59.7% decline in the deficit.

The reason for this narrowing in the trade deficit was due to the declining exports as well as imports at the same time. Exports in July 2016 declined by 6.84% to $21.6 billion (Rs 1.45 lakh crore) from $23.2 billion (Rs 1.48 lakh crore) in the same month a year ago. While imports saw a much larger drop of 19.03% to $29.4 billion from $36.3 billion a year ago.

This comes after a rise in exports in June after a 18-month gap.

Non-petroleum exports in July 2016 are valued at $19.1 billion against $20.08 billion in July 2015, a decrease of 4.46%. Non-petroleum exports during April to July 2016 are valued at $77.8 billion as compared to $78.7 billionfor the corresponding period in 2015, a reduction of 1.12%.

The growth in exports have fallen for USA (-6.57%), Japan (-1.80%), China (-5.49%) but European Union exhibited positive growth (1.37%) for May 2016 over the corresponding period of previous year as per latest WTO statistics.

Exports of services during June 2016 were valued at $13.3 billion (Rs 89,652.93 crore) registering a negative growth of 1.03% in dollar terms as compared to positive growth of 4.28% during May 2016, according to RBI’s Press Release for the respective months.

Cumulative value of imports for the period April-July 2016-17 was $1.13 billion (Rs 7.63 lakh crore) as against $1.36 billion (Rs 8.65 lakh crore) registering a negative growth of 16.33% in Dollar terms and 11.75% in Rupee terms over the same period last year.

Oil imports during July, 2016 were valued at $6.8 billion which was 28.10% lower than oil imports valued at $9.48 billion in the corresponding period last year.

Imports of services during June 2016 were valued at $8.3 billion (Rs 56,455.37 crore) registering a positive growth of 5.89% in dollar terms as compared to positive growth of 10.29% during May 2016, as per RBI’srelease for the respective months.