July merchandise exports up 2.25%, imports fall over 10%

Container Terminus of Container Corporation of India.

New Delhi, India’s merchandise exports rose 2.25 per cent in July on a year-on-year basis to $26.33 billion from $25.75 billion reported for the corresponding month of the previous year.

As per the data furnished by the Ministry of Commerce and Industry, ‘electronic goods’, ‘drugs and pharmaceuticals’, ‘organic and inorganic chemicals’ and ‘marine products’ showed high export growth during the month under review.

“Non-petroleum and non-gems and jewellery exports in July 2019 were $19.70 billion, as
compared to $18.72 billion in July 2018, exhibiting a positive growth of 5.28 per cent,” the ministry said.

On the other hand, imports declined by 10.43 per cent to $39.76 billion in July from $44.39 billion reported for the corresponding month of 2018.

“Oil imports in July 2019 were $9.60 billion, which was 22.15 per cent lower in dollar terms (22.02 per cent lower in rupee terms), compared to $12.33 billion (Rs 84,707.59 crore) in July 2018,” the ministry said.

“Non-oil imports in July 2019 were estimated at $30.16 billion (Rs 2,07,522.94 crore), which was 5.92 per cent lower in dollar terms (5.76 percent lower in rupee terms), compared to $32.06 billion (Rs 2,20,209.17 crore) in July 2018.”

Besides, the ministry data showed that non-oil and non-gold imports declined by 2.22 per cent to $28.45 billion from $29.09 billion in July 2018.

Consequently, the trade deficit in July narrowed to $13.43 billion as against the deficit of $18.63 billion in the corresponding period of 2018.

“Consumer durable and consumer non-durable goods like electronic goods, pharma, marine and textiles have outperformed the overall export growth of 2.25 per cent for the month of July 2019,” said Trade Promotion Council of India Chairman Mohit Singla.

“This brings good news to exports despite the fact that the expected global slowdown demand for these products have increased internationally. This shows that Indian products have started gaining acceptability at global the market.”

According to Engineering Export Promotion Council India Chairman Ravi Sehgal: “Global head winds and domestic constraints continue to impair India’s exports, as is evident from subdued expansion of 2.25 per cent in July, but the shipments in the engineering sector have slipped into negative.”

“This is a cause for concern, especially for the highly employment-oriented and MSMEs driven engineering exports which have degrown by 1.69 per cent in July 2019. There is an urgent need for an effective intervention and relief from the government and the RBI for the exporters.”

ICRA Principal Economist Aditi Nayar said: “The sharp reduction in the merchandise trade deficit in July 2019 relative to July 2018 was largely driven by the moderation in crude oil imports as well as a temporary lull in gold imports after the Union Budget.

“Moreover, lower commodity prices reduced the size of the import bill in July 2019. While high gold prices may act as a deterrent, demand for gold imports may revive closer to the festive and marriage season.”