India’s trade deficit expanded in July 2024 at USD 23.5 Billion, driven by a combination of declining merchandise exports and rising imports, as released by the Ministry of Commerce and Industry on Wednesday.
Previous month in June, India recorded a trade deficit of USD 20.98 Billion.
Merchandise exports for July 2024 stood at USD 33.98 billion, slightly down from USD 34.49 billion in July 2023, down by 1.4%.
Imports rose 7.5% year-on-year to USD 57.48 billion, up from USD 53.49 billion in the same period last year. This resulted in a merchandise trade deficit of USD 23.50 billion.
Exports and imports in services stood at USD 28.43 billion and USD 14.55 billion respectively this month.
The overall trade balance, which includes both merchandise and services, also declined, with a deficit of USD 9.61 billion in July 2024, compared to a deficit of USD 6.52 billion in July 2023.
Amid uncertainties, India is exploring new markets such as Africa and is looking to diversify its export goods basket to offset the weakness in western economies, Trade Secretary Sunil Barthwal told Reuters.
The cumulative trade deficit for the April-July 2024 period reached USD 31.17 billion, reflecting a growing gap between exports and imports.
“Major drivers of merchandise exports growth in July 2024 include Electronic Goods, Engineering Goods, Drugs & Pharmaceuticals, Meat, dairy & poultry products and RMG of all Textiles,” said the data released by the Ministry of Commerce and Industry.
Trade deficit occurs when a country’s imports exceed its exports during a given period. It represents an outflow of domestic currency to foreign markets, as more money is spent on buying foreign goods and services than is earned from selling domestically produced ones abroad.
Despite these gains in certain sectors, the overall export performance was not enough to offset the rising import costs, leading to the widening trade deficit.
Movement of Trade Deficit in FY25
