India’s trade deficit widens to $23.5 billion in July, merchandise exports dip 1.48%

Vijay C Roy

Tribune News Service

Chandigarh, August 14

India’s merchandise exports contracted 1.48 per cent to $33.98 billion in July due to muted global demand and geopolitical challenges, on the contrary inbound shipments into the country or imports rose 7.46 per cent to $57.48 billion during the month, leading to a trade deficit, according to the Ministry of Commerce & Industry data.

As a result the country faced a widening trade deficit of $23.50billion, marking a significant increase from $19 billion in the same period last year and from $20.98 billion in June.

“This escalation is primarily driven by a 7.5% rise in imports, totalling $57.48 billion, juxtaposed against a modest 1.5% decline in exports, which amounted to $33.98 billion. The surge in imports reflects India’s robust internal demand, particularly for crude oil and electronics. The increase in import spending highlights India’s dependence on energy commodities, whose prices have been particularly volatile due to geopolitical tensions,” said Arsh Mogre, Economist - Institutional Equities, PL Capital - Prabhudas Lilladher.

Conversely, the slight decrease in exports can be attributed to global economic pressures and shifting trade winds, including protectionist tendencies in significant markets such as the US. Despite this, sectors like electronics have shown impressive resilience, buoyed by increasing international demand.

This is evident from the 31.7 per cent jump in smartphone exports, which reached $4.9 billion in the first quarter of the year, showcasing India’s growing prowess in manufacturing and exporting high-tech commodities.

India’s total exports (merchandise and services) during April-July is estimated at $261.47 billion registering a positive growth of 6.65%. Total imports during April-July is estimated at $ 292.64 billion registering a growth of 7.30%.