India’s May 2024 exports up 9.1% to $38.13 bn but trade deficit widens

India’s merchandise exports increased to $38.13 billion at the rate of 9.1 per cent on a year-on-year basis in the month of May 2024, according to government data released on Friday. Merchandise imports in the same month surged to $61.91 billion at 7.7 per cent year-on-year.

Trade deficit of the country, which outlines the difference between exports and imports, for the month of May 2024 was, therefore, $23.78 billion, the data added, in comparison to the April 2024 trade deficit of $19.1 billion. A Reuters survey had earlier suggested that economists were of the opinion that India’s trade deficit would be restricted to $19.5 billion in the given period of time.

India’s exports were primarily boosted by shipments of smartphones, commercial vehicles and engineering products while crude oil, gold and petroleum products have been the biggest imports of the country.

India is the third-largest economy of Asia after China and Japan, and it grew at an unexpected rate of 7.8 per cent from January to March 2024, or the final quarter of FY24. This was propelled by the robust show of the country’s manufacturing sector.

Merchandise exports stood at $437 billion in the fiscal year 2023-’24, or FY24, at a rate of 3.1 per cent, and industry observers feel the figure is bound to witness growth in the ongoing fiscal year, driven by incentives the government has accorded to the manufacturing sector, resurgence in international trade and moderation of domestic inflation.

India’s exports in the services sector during the month of May 2024 was $30.16 billion while imports during the same month was $17.28 billion. In comparison, exports in the month of April 2024 clocked $30.33 billion and the import figures were $16.63 billion.