India’s Merchandise Trade Deficit Widens In July To $20.67 Billion, Imports, Exports Fall

The merchandise trade deficit of the country widened from $20.13 billion in June 2023 to $20.67 billion in July. The merchandise trade deficit stood at $25.43 billion for the month of June 2022. 

India's imports fell from $53.10 billion in June to $52.92 billion in July and exports decreased from $32.87 billion in June to $32.25 billion in July.

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India reported a widened trade deficit for the month of July on Monday. According to the data released by the Indian government, the merchandise trade deficit of the country widened from $20.13 billion in June 2023 to $20.67 billion in the month of July. The merchandise trade deficit stood at $25.43 billion for the month of June 2022. 

Analysts estimated the July trade deficit at $21 billion, based on a poll by Reuters. 

The merchandise imports for the country also decreased in July, compared to a month earlier. The imports fell from $53.10 billion in June to $52.92 billion in July. The imports for June 2022 stood at $63.77 billion. While the merchandise exports decreased from $32.87 billion in June to $32.25 billion in July, the exports for June 2022 stood at $38.34 billion, reported the Economic Times. 

The report further noted that the last twelve months have witnessed a slowdown in global commerce. This could be due to concerns surrounding a recession in the big economies worldwide. China itself reported the biggest contraction in overseas shipments this week since the pandemic. Notably, China is the world’s biggest exporter. Further, the world’s third-best exporter, Germany reported in the latest monthly data that its exports fell by the most on a year-on-year (YoY) basis since early 2021, the report added. 

US, the world’s largest exporter after China, also stated that it’s exports decreased over the year. The report stated, however, that the US economy is strengthening due to strong domestic demand, something lacking in a lot of economies across the world. 

The report added that India’s finance ministry recently flagged concerns about the momentum of growth for the Indian economy. “Negative cross-border spillovers and adverse global developments can act anytime as a deterrent to achieving the potential high growth path in the current financial year,” the ministry noted in it’s monthly economic review. 

The review further expects the trade deficit in the country to narrow in the upcoming years, on the basis of a robust performance in services exports.