Summary
India's goods trade deficit widened to $30.4 billion in June from $28.2 billion in May, with the expansion attributed mainly to an increase in the non-oil trade shortfall, according to analysis cited from Goldman Sachs. Merchandise exports and imports showed divergent momentum year-on-year and on a seasonally adjusted sequential basis.
Detailed trade flows
On a year-over-year basis, merchandise exports grew 15.5% in June, slowing from 18.0% growth recorded in May. Merchandise imports accelerated more sharply, rising 31.0% year-on-year in June compared with 20.6% growth in the prior month.
Looking at seasonally adjusted month-over-month movements, total goods exports fell by about 2%. The sequential decline was led by lower shipments of petroleum products and engineering goods. Engineering goods specifically declined 2.8% month-over-month while remaining 21% higher compared with the same month a year earlier.
Regional trade patterns showed weakening trade with some Gulf partners. Exports to the United Arab Emirates and Saudi Arabia contracted, a trend the analysis links to continued disruptions to shipping lines via the Strait of Hormuz. Exports to the UAE remained roughly 17% below pre-conflict levels. Exports to the United States also fell on both a sequential and year-on-year basis.
Commodity and sector specifics
- Oil imports fell around 1.4% month-over-month on a seasonally adjusted basis to $19.3 billion, a move attributed to lower crude oil prices. Despite lower values, import volumes continued to rise in June, with imports from Russia reported to be roughly 30% higher.
- Gold imports declined about 20% month-over-month in June but were up 7% year-over-year; this drop in monthly terms is attributed to lower import volumes following an increase in import duties by the government.
- Non-oil, non-gold imports rose approximately 7% month-over-month and 29% year-over-year. This segment's increase was largely driven by electronics goods, which jumped 9.4% month-over-month and 59% year-over-year.
Services trade
The services trade surplus narrowed to $15.1 billion in June from a revised $15.7 billion in May. Services exports rose 2.9% year-over-year in June while services imports increased 12.7% over the same period.
Market note
Market instruments that track India, including the iShares MSCI India ETF (INDA), were shown alongside the data in market displays accompanying the release.