India Registers Contraction In Merchandise Exports In July: Crisil

Led by the slowdown in oil, gems and jewellery exports and the high demand for oil imports, India’s merchandise exports contracted by 1.5 per cent on a year-on-year (YoY) basis in July. As per the report by Crisil, the country’s merchandise exports were USD 33.9 billion in July. The growth in imports picked up 7.5 per cent on-year in July.

The crisil report stated that 7.5 per cent growth in imports in July was higher than 5 per cent in the previous month due to higher oil imports. July’s imports were USD 57.48 billion, which contributed to the widest monthly trade deficit in nine months.

The trade deficit widened to USD 23.5 billion in July as compared with USD 21 billion in the previous month. The same deficit was USD 19 billion in the previous fiscal.

Core exports were up by 5.7 per cent during the month, albeit lower than the average 8.7 per cent growth seen in the past two months. On the other hand, core imports rose by 7.8 per cent, compared to 7.1 per cent in the previous month.

The uptick in exports was led by electronic goods (37.3 per cent), meat, dairy and poultry products (56.2 per cent), tea (21.8 per cent) and oil meals (22 per cent), as they marked strong growth on a YoY basis. On the other hand, categories such as gems and jewellery (down by 20.4 per cent), ceramic products and glassware (-21.1 per cent) and rice (-15.3 per cent) witnessed a decline in the month.

Oil exports dipped by 22.2 per cent on a YoY basis, as the Brent spot price increased from USD 80.1 per barrel in July 2023 to USD 85.3 per barrel in July 2024. Oil imports, however, grew by 17.3 per cent YoY due to high domestic demand, Crisil reported.

The exports of manmade yarn and fabrics were higher in July as compared with June. However, the growth in drugs and pharmaceuticals, engineering goods, fruits and vegetables and iron ore took a dent in July. The Import of silver, leather and leather products, and newsprint surgical instruments registered strong growth during the month.

Overall, the merchandise exports for the April to June 2024 period grew by 4.15 per cent to USD 144.12 billion. On the other hand, imports for the same period grew at 7.6 per cent to USD 229.7 billion from USD 213.53 billion.

Keeping a positive outlook, Crisil stated that the current fiscal year has started on a good note, with merchandise exports logging steady numbers in the first quarter. It also hoped that the increased focus on the foreign trade agreements by the Centre should also provide thrust