Trade deficit widens

India’s exports rose 14.3% to $25.8 billion in July mainly on account of better performance of gems and jewellery sector as well as petroleum products, even as trade deficit soared to a near five-year high of $18 billion. The merchandise exports had totalled $22.5 billion in July 2017.

Imports during July were valued at $43.8 billion, a growth of 28.8% compared to $33.9 billion in the year ago period. The sharp surge in imports led to worsening of trade deficit to $18 billion in the reporting month as against a deficit of $11.5 billion during July 2017.

Over 57% increase in oil import bill ($12.4 billion) and 41% jump in gold imports to $2.9 billion during July are believed to be main reasons behind high trade deficit. As regards exports, the outward shipments of petroleum products surged from $3 billion in July last year to $3.9 billion, showing a growth of about 30%. Export of gems and jewellery was up 24.6% to $3.2 billion.

Meanwhile, the RBI data on trade in services said exports (receipts) during June 2018 were valued at $16.9 billion or up 4.3% on an annual basis. Services imports were $10.3 billion in June, up by 0.9% over the same month last year. The data on services is released with a lag of one month. 

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