Exports have now contracted for the fourth month in a row, after contracting 12.7 per cent in April due to the global demand slowdown, according to the government data.
India’s merchandise trade deficit in May stood at $22.12 billion, according to a Reuters calculation based on export and import data released by the government. The trade deficit had reduced to a 20-month low of $15.24 billion in April.
The wider trade gap highlights the challenges for the economy trying to recover from the scars of the pandemic and higher borrowing costs. It is a risk for the nation’s current account deficit, which can affect investor sentiment and hurt appeal of the local currency.
Services exports were $25.30 billion and imports $13.53 billion in May. The services sector is providing some reprieve for now. India’s services exports are booming owing to a sharp jump in information technology and business consulting work. It is estimated to rise to $25.3 billion in May.
In the last two years, India’s exports jumped from $500 billion to $767 billion in 2022-23.Commerce Secretary Sunil Barthwal said headwinds still continue on the global trade front. The Department of Commerce and Department for Promotion of Industry and Internal Trade are working on an exports strategy and focusing on 40 countries, Barthwal added.(More to come)