New Delhi: India’s exports growth slowed to a four-month low in June while heavy buying of gold lifted imports, causing a spike in trade deficit from a year earlier, though the gap narrowed from the previous month.
Exports grew 4.39% to $23.5 billion, while imports rose faster at 19% to $36.5 billion, data from the commerce department showed, leaving a trade gap of about $12.9 billion in June, compared with $8.1billion in the yearearlier period and $13.84 billion in May. Gold imports doubled from a year earlier to $2.4 billion.
For the fiscal first quarter, trade deficit more than doubled to $40 billion from $19.2 billion a year earlier. “An unabated surge in imports of gold and precious stones contributed to the wider-than-expected merchandise trade deficit of $13 billion in June 2017, even as merchandise exports printed in line with expectations,” said Aditi Nayar, principal economist at ICRA.
Half of the 30 export sectors showed a decline. “This is a cause of concern. It means the diversification policy of the government is not working,” said Ajay Sahai, director-general at the Federation of Indian Exports Organisation. Major commodity groups of export that showed growth over the year-earlier period were engineering goods (14.78%), petroleum products (3.6%), organic and inorganic chemicals (13.2%), rice (27.29%) and marine products (24.27%). India reported these muted numbers at a time when China posted better than expected exports with an 11.3% expansion in June.
Source: Economic Times