India’s merchandise export grew 3.9% to 22.54 billion in July, marking an annual increase in shipments for the 10th straight month, but slower than the 4.4% growth posted in the previous month. The growth of imports, despite continued surge in the influx of gold, slowed in July to an annual 15.4% from 19% in the previous month, precipitating a narrower trade deficit of $11.45 billion. The trade shortfall was $12.96 billion in June. India imported goods worth $33.99 billion last month, as against $36.52 billion in June.
As for exports, engineering goods (up 15.2%), petroleum products(20.3%) and chemicals (20.7%), performed well in July, but several other sectors reported contraction. Pharmaceutical exports declined 5.4% year on year, apparel exports fell 12% and gems and jewellery saw a 22.7% fall.
South Korean imports via the FTA route had seen gold imports surge 104% to $2.45 billion in June. The imports saw 95% rise in July to $2.1 billion. “…the need of the hour is the sectoral analysis which should be initiated soon to pin-point factors responsible for decline in (exports from many sectors),” Ganesh Kumar Gupta, president of Federation of Indian Export Organisation (Fieo), said.
Oil imports were valued at $7.84 billion in July, an increase of 15% over the same month in 2016. Cumulative import during April-July increased by 28.3% to $146.25 billion, leaving a trade deficit of $51.5 billion. Fieo has also cautioned that the order booking position October onwards is not very promising and the appreciation of Indian currency with increasing pressure on liquidity under the goods and services tax may affect exports in the last quarter of 2017 bringing exports to $310 billion in the current fiscal.