India's Merchandise Exports Touch Record $44.24 Bn In July, Trade Deficit Widens

India's merchandise exports climbed 19.5% year-on-year (YoY) to touch $44.24 billion in July, up from $37.02 billion a year earlier, marking the highest figure recorded for the month, according to government data.

For the April-July period, merchandise exports grew 17% to $173.78 billion compared with the same stretch last year. Imports rose at a faster clip of 19.27% to touch $292.38 billion, pushing the merchandise trade deficit to $118.6 billion, up from $96.66 billion a year earlier.

When services are factored in, overall exports increased 13.16% to $316.42 billion during April-July, against $279.63 billion in the year-ago period, while imports rose 17.28% to $365.85 billion. This left India with an overall trade deficit of $49.43 billion, compared with $32.32 billion a year earlier. The Reserve Bank of India's latest services data is available only up to June, so the July services number used here is an estimate.

Engineering goods remained the top export category, rising to $46.38 billion during April-July from $39.24 billion a year earlier. Petroleum product exports increased to $30.17 billion from $21.15 billion, and electronic goods exports rose to $21.11 billion from $16.16 billion.

Pharmaceutical exports stood at $10.79 billion against $10.25 billion a year earlier, while organic and inorganic chemicals exports rose to $10.69 billion from $9.43 billion. Gems and jewellery exports increased to $9.59 billion from $9.05 billion.

Crude Oil, Electronics Drive Import Bill

Petroleum, crude oil and related products remained India's largest import category, rising to $78.92 billion from $64.81 billion a year earlier. Electronic goods imports jumped to $52.82 billion from $36.59 billion, machinery imports rose to $22.77 billion from $19.44 billion, and gold imports increased to $15.17 billion from $11.46 billion.

The US stayed India's top export market during April-July, with shipments rising to $34.49 billion from $33.48 billion. The UAE followed at $11.22 billion, while exports to Singapore nearly doubled to $8.11 billion from $4.11 billion. On imports, China remained the largest source at $52.71 billion, up from $40.65 billion, followed by Russia at $34.50 billion against $21.61 billion a year earlier.

India aims to more than double its total exports to $2 trillion by FY31, split evenly between merchandise and services. The government has directed officials to focus on micro, small and medium enterprises, farm products, certification and promotion of "Brand India." The central bank has flagged weak global demand and high logistics costs as risks to merchandise exports, while services exports are expected to hold steady on healthy demand.