Rebound in shipments to West Asia and strong performance in other Asian and African markets helped India’s merchandise exports grow 15.5% to $40.41 billion in June. But a 31% increase in imports to $70.84 billion pushed up the trade deficit to a five-month high of $30.43 billion.
The biggest drivers of imports and the deficit were a 40% increase in crude oil imports to $19.3 billion, a 59% jump in electronic goods imports to $13.3 billion, and machinery imports that grew 31% to $5.79 billion.
The rise in two-way shipments was also aided by low bases: exports had grown just 1.3% in June last year, while imports shrank 3.4%.
Goods exports grew at nearly 18% in May and 14.2% in April, recovering from a 4-month slump.
Exports to West Asia, which had fallen sharply in March to $2.62 billion as the war began, grew 7.3% to $5 billion. The rebound in West Asia shows that alternate arrangements to get goods to the region after the disruption of shipping routes are showing results.
“Our exports to the Middle East have evened out. Whatever challenges we faced in March, April and May have now been tackled,” Commerce Secretary Rajesh Agrawal said. As alternate routes became available, imports from the region have also grown.
Exports to the biggest market – the United States- were down 1.2% to $8.17 billion during the month.
The biggest jump in exports was seen in exports to South Africa with shipments expanding by 114% to $1.05 billion. Tanzania was another growth market in Africa with a growth of 93.76%. In Asia exports to Malaysia were up 99.2% to $758 million. Singapore grew 48.9% to $1.40 billion, China 31.50% to $1.80 billion, Sri Lanka 33.87% to $549 million.
While exports to the US have stagnated, imports from it grew 33.8% to $5.50 billion in June. Officials largely attribute the jump to enhanced energy imports. Despite the growth of energy supplies from the US, imports from Russia were up 85.0% to $8.7 billion.
Among product categories, the biggest segment, engineering goods, saw an expansion of 20.7% to $11.4 billion. Electronics exports surpassed petroleum product exports with a growth of 18.9% to $4.9 billion in June. Petroleum products, despite the elevated crude prices, saw exports growing at 9.2% to $4.8 billion. Other high-growth sectors were chemicals, gems and jewellery, meat and marine products.
The contribution of petroleum and gems and jewellery to export growth in June was muted despite high input prices. Non-petroleum and non-gems and jewellery exports were also up 15.31% to $33.13 billion.
Overall growth in exports – goods and services combined – in June was 9.4% to $73.45 billion, while imports were up 26% to $88.76 billion. For the April-June quarter merchandise exports grew 15.92% to $129.32 billion, while imports were up 19.89% to $216.18 billion. Overall exports of goods and services in April-June stood at $232.73 billion, showing a growth of 11.37%. The first-quarter performance raises hopes of reaching the target of $1 trillion in overall exports this financial year.