Mumbai : India’s merchandise trade deficit widened to $31.98 billion in July even as goods exports reached a monthly record of $44.24 billion, with imports rising faster on higher purchases of electronics, gold and other goods.
The July deficit was higher than the $30.43 billion recorded in June and $27.88 billion a year earlier, making it the widest merchandise trade gap in six months.
Merchandise exports rose 19.63% from a year earlier to $44.24 billion. Petroleum products, electronic goods and engineering products were among the main contributors to the increase.
Petroleum product exports rose 67.64% to $6.92 billion in July, while electronic goods exports increased 57.4% to $5.92 billion. Engineering goods exports rose 17.71% to $12.24 billion, according to Commerce Ministry data.
The stronger export performance, however, was not enough to narrow the trade gap because merchandise imports climbed to $76.22 billion from $70.84 billion in June.
Electronics imports jumped 44% year-on-year to $14.37 billion, while gold imports rose nearly 5% to $4.16 billion. The crude oil import bill stood at $18.31 billion in July despite the volume of oil imports being slightly lower than in June, as global prices remained elevated.
Higher freight costs and disruptions linked to the conflict in West Asia have added pressure to India’s import bill. Indian exporters have also faced higher shipping costs and container shortages, making international trade more expensive.
The goods deficit does not show the full picture of India’s external trade because the country continues to earn a large surplus from services. Services exports were estimated at $35.89 billion in July, while services imports stood at $18.94 billion, leaving a surplus of $16.95 billion.
The final services figures will be released later by the Reserve Bank of India.
Combining goods and services, India’s total exports for July were estimated at $80.14 billion, up 13.31% from a year earlier. For the April-July period, total exports reached an estimated $316.42 billion, while total imports were $365.85 billion, leaving an overall trade gap of about $49.43 billion.
The July numbers therefore show two different trends in India’s external trade. Goods exports are growing strongly, particularly in petroleum products, electronics and engineering, but the country’s import bill remains much larger.
The pressure is especially visible in energy and manufactured inputs, where international prices and supply disruptions can quickly increase India’s dollar requirement.
The United States remained India’s largest export destination during the April-July period, with merchandise shipments worth $33.49 billion. Exports to the Middle East also rose 8.6% year-on-year to $5.7 billion in July.
India’s trade position will now depend partly on whether export growth can remain strong while oil, freight and other import costs stay elevated.
