Exports up 23.5% to $40 bn in June; trade deficit widens to record $26.2 bn

Exports in June rose by 23.52 per cent to $40.13 billion while the trade deficit ballooned to a record level of $26.18 billion mainly due to jump in gold and crude oil imports, the government data said on Thursday.

The country's export growth in May was 20.55 per cent.

Imports expanded by 57.55 per cent to $66.31 billion in June compared to the year-ago month, the data showed.

"The merchandise trade deficit in June 2022 was estimated at $26.18 billion as against $9.60 billion in June 2021, which is an increase of 172.72 per cent," the commerce ministry said in a statement.

Crude oil imports in June almost doubled to $21.3 billion. Coal and coke imports more than doubled to $6.76 billion in the month under review as against $1.88 billion in June 2021.

Gold imports too rose sharply by about 183 per cent to $2.74 billion.

Imports in June 2021 were subdued on account of restrictions due to the second wave of Covid-19 pandemic. Subdued imports resulted in lower trade deficit of $9.6 billion in June 2021.

Cumulative exports in April-June 2022-23 rose by 24.51 per cent to $118.96 billion while imports increased 49.47 per cent to $189.76 billion during the period.

The trade deficit during the first three months of this fiscal widened to $70.80 billion from $31.42 billion in the year-ago period.

On the exports front, outbound shipments of petroleum products more than doubled to $8.65 billion. Gems and jewellery shipments increased by 25 per cent to $3.53 billion.

Shipments of textiles, rice, oil seeds, tea, engineering, and meat, dairy and poultry products too recorded positive growth during the last month.

However, exports of iron ore, handicrafts, plastic and linoleum, cotton yarn/ fabrics/made-ups, handloom products, carpet and cashew registered negative growth in June.

Commenting on the numbers, Icra Ltd chief economist Aditi Nayar said that the trade deficit poses some upside risks to the current account deficit for the first quarter of this fiscal.

"We foresee modest downsides to our FY23 current account deficit forecast of $105 billion or 3 per cent of GDP," she said.

Further, the ministry said that the estimated value of services export for June 2022 is $24.77 billion, exhibiting a positive growth of 22.04 per cent.

Services imports during the month rose by 48.62 per cent to $16.11 billion.

During April-June period of this fiscal, the exports grew by 26.25 per cent to $$70.97 billion. Imports increased by 49.15 per cent to $45.35 billion.