India's trade deficit spikes to 17-month high in July as exports decline

Exports dipped, though marginally, for the first time in 17 months in July, while trade deficit tripled to a record USD 31 billion fuelled by over 70 per cent rise in crude oil imports.

The July 2022 exports at USD 35.24 billion showed a decline of by 0.76 per cent on annual basis. The country's merchandise exports stood at USD 35.51 billion in July 2021.

The previous decline in exports was recorded in February 2021 when the shipments had dipped by 0.4 per cent.

As per the preliminary data released by the commerce ministry, India's merchandise import in July 2022 was USD 66.26 billion, up 43.59 per cent over USD 46.15 billion in the year-ago month.

However, the exports in April-July 2022-23 stood at USD 156.41 billion, an increase of 19.35 per cent over USD 131.06 billion in the corresponding period last fiscal.

India's merchandise imports in April-July 2022-23 was USD 256.43 billion, up 48.12 per cent year-on-year.

Imports of crude and petroleum products during July this year was USD 21.13 billion, up 70.4 per cent compared to USD 12.4 billion in July 2021.

Imports of coal, coke and briquettes were up 164.43 per cent while that of vegetable oil rose 47.18 per cent.

Inbound shipments of gold, however, declined by 43.6 per cent to USD 2.37 billion compared to 4.2 billion in July 2021.

Higher imports compared to exports widened the trade deficit to USD 31.02 billion in July this year. It has almost tripled from USD 10.63 billion in the same month of the previous fiscal.

The deficit has increased to USD 100.01 billion during April-July 2022-23.

Exports of engineering goods; petroleum products; gems and jewellery; and drugs and pharmaceuticals, contracted in July 2022 year-on-year.

On the other hand, outward shipments of engineering goods posted a healthy growth on annual basis.

"Exports of USD 156.41 billion in first four months of the fiscal puts us on track to achieve USD 470 billion in the current fiscal comfortably," commerce secretary B V R Subrahmanyam said while talking to reporters about the trade data.

"We are not living in normal times. The easy times where we could exploit more global trends last year... Are changing. The external world is no longer benign. So we have to work harder," Subrahmanyam said, adding, "The exports in July 2022 are almost static compared to July 2021."

Referring to the exports figures for the first four months of the fiscal till July, the secretary said based on calculations "we will actually be comfortably above USD 500 billion (merchandise exports overall in FY23)".

The commerce ministry said that over USD 35 billion exports in July has been achieved despite measures to control inflation and the continued disruptions of supply chains due to Covid and Russia-Ukraine conflict.