Exports fall 4.6% in June; trade deficit declines

The main reason for the decline in imports and trade deficit was dip in gold and silver imports, Director General of Foreign Trade (DGFT) Anup Pujari said

India's exports contracted by 4.6%, for the second consecutive month, to $23.79 billion in June 2013 compared to that in the year-ago period.

 

Imports too declined marginally by 0.37% to $36 billion in the month, leading to a trade deficit of $12.2 billion. In May, the trade gap stood at $20.1 billion.

 

The main reason for the decline in imports and trade deficit was dip in gold and silver imports, Director General of Foreign Trade (DGFT) Anup Pujari said.

 

Gold and silver imports in June decreased to $2.45 billion from $8.4 billion in May.

 

Cumulatively, exports during April-May too dipped by 1.41% to $72.45 billion. However, imports during the period were up by 5.99% to $122.6 billion.

 

“Decline in gold and silver imports could be attributed to the steps taken by the government and the RBI,” Pujari said.

 

Oil imports in June grew by 13.74% to $12.76 billion from $11.22 billion in the same period last year. On the other hand, non-oil imports declined by 6.7% to $23.2 billion.

  • User 

    India’s trade deficit to worsen in May despite large inflows

    India's trade deficit worsened sharply in May, after improving in March due to seasonality. This likely explains why the rupee has been weak despite large portfolio inflows, says Nomura

     
    After a sharp improvement in March, India's trade deficit worsened in April and much more sharply in May. The seasonal worsening in May is as large as during the festive month of October and reflects a seasonal pick up in the imports of oil, fertilizer and chemicals. Gold imports also would have risen due to the bringing forward of demand in response to lower prices.
     
    “One of the puzzling trends in recent weeks has been a stable-to-weak US dollar and Indian rupee, despite large foreign institutional investor (FII) fund inflows. In our view, the reason lies in the seasonal pattern in the trade balance. After the positive surprise in the March trade deficit, which improved to a two-year low of $10.3 billion, we expect the trade deficit to worsen again in April to $15.5 billion and much more in May," says Nomura in a research note.
     
    According to CEIC and Nomura estimates a higher seasonal factor implies a higher trade deficit and vice-versa. Hence, March is the best month for the trade deficit while May and October are seasonally the worst months. 
     
    Portfolio inflows in India over the past fortnight have been robust with $5.6 billion invested in FII debt and equity together. Out of this $2.6 billion were invested in May alone. 
     
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    Exports contract 5.45% in June to $25 billion

    During the April-June quarter, exports shrunk 1.7% to $75.2 billion while imports also dipped 6.1% to $115.26 billion from same period last year

    New Delhi: India's exports contracted by 5.45%, year-on-year basis, to $25.07 billion in June due to the persisting global economic slowdown, reports PTI.

    Imports also declined by 13.46% to $35.37 billion, leaving a trade deficit of $10.3 billion, according to the Director General of Foreign Trade A Pujari.

    Meanwhile, Commerce Secretary SR Rao told reporters that, "Exports have contracted but trade deficit is also coming down."

    During the April-June quarter of this fiscal exports have shrunk 1.7% to $75.2 billion over the first quarter of 2011-12. Imports have also dipped by 6.1% during the first quarter of 2012-13 to $115.26 billion.

    Trade deficit in Q1 has declined to $40.06 billion, from $46.30 billion in April-June last fiscal.

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