India-flagged SCI CHENNAI container ship is moored at Hamad Port in the Qatari capital Doha on March 20, 2022.
Credit: PTI Photo
New Delhi, DHNS
India’s trade deficit widened to a seven-month high of $23.78 billion in May from $19.1 billion recorded in the previous month, driven by a jump in import of oil and gold, even though exports posted a healthy over 9% growth, official data released on Friday showed.
India’s exports increased by 9.1% year-on-year to $38.13 billion in May while imports jumped to $61.91 billion, registering a growth of 7.7% when compared with the same month last year.
The growth in exports was led by a healthy double-digit increase in the shipment of electronic goods, petroleum products, drugs and pharmaceuticals, plastics & linoleum and meat & dairy products.
As per data released by the Ministry of Commerce and Industry, the United States, Netherland, the United Arab Emirates, Malaysia and the United Kingdom led the increase in shipments from India.
Addressing a media briefing Commerce Secretary Sunil Bharthwal said easing in inflation in developed economies have boosted demands. “We hope this trend should continue this year and also hope that there should be no more geopolitical conflicts and no more disruptions in major global shipping routes,” he said.
India’s total exports (merchandise and services combined) for May stood at $68.29 billion, which is 10.25% higher when compared with the figure of the same month last year. The country’s total imports increased by 7.95% year-on-year to $79.20 billion in May.
The estimated value of services export for May is $30.16 billion as compared to $26.99 recorded in the same month last year. In sequential terms, 71% of the enlargement in the merchandise trade deficit in May 2024 relative to April 2024 was driven by the net oil balance, said Aditi Nayar, Chief Economist, ICRA.
Engineering goods exports increased by 7.39% from $9.99 billion in May. "The upturn in shipments reflects an improvement in the demand scenario in India's key markets," said EEPC India Chairman Arun Kumar Garodia.
“The global economic outlook is expected to improve in the ongoing fiscal and the exporting community remains optimistic,” he added.
Merchandise trade deficit during April-May 2024 increased to $42.89 billion as compared to $36.97 billion during the corresponding period of the last year.