A sharp rise in crude oil bill led to India’s trade deficit widening to a 61-month high in June, despite sustained growth in engineering and pharmaceutical products that boosted exports by 17.57 per cent.
The trade deficit increased to $16.61 billion, up from the $14.62 billion gap in May.
India continued to take advantage of the same rising global crude prices on the exports side, as receipts from processed petroleum exports swelled by 52.53 per cent to $4.06 billion. This was however, lower than the 102 per cent growth seen in May.
Overall, the country exported goods worth $ 27.7 billion in June, thereby ensuring that outbound shipments rose for the third straight month.
Among major sectors, engineering goods exports maintained a sustained growth of 14.19 per cent in June to ship out merchandise worth $6.74 billion, down from the 14.77 per cent rise seen in May. Pharma exports also rose to $ 15.8 billion, growing by 14.71 per cent in June, down from the 25.67 per cent rise in the previous month.
Export of ready-made garments continued to drop in June, contracting by 12.34 per cent.
Gems and jewellery exports rose by 2.72 per cent after months of contraction. May exports had fallen by 6.47 per cent. Despite this, gold imports continued to remain in negative territory for the sixth consecutive month, a position it has remained in, ever since news about the Rs 140-billion Nirav Modi scam broke earlier this year.
However, the fall in gold imports slowed down for the third straight month to register a total bill of $2.38 billion. Imports of the shiny metal fell by only 2.8 per cent in June as compared to the much larger 29.85 per cent fall seen in May.
The MSME sectors of exports, however, are still feeling the pinch of liquidity crunch as banks and lending agencies have continuously been tightening their lending norms. Of the 30 major product groups, 22 recorded growth in May, down from the 23 a month ago.