Goods exports decline in July

India exported merchandise goods worth $33.98 billion in July, slightly lower than the $34.49 billion registered during the same month a year ago. Imports rose to $57.48 billion in July 2024, compared to $53.49 billion in July 2023.

However, excluding petroleum and gems & jewellery items, the value of exports in July 2024 was $26.92 billion, higher than $25.47 billion in July 2023. The growth was led by electronic goods (37.31% growth from $2.04 billion in July 2023 to $2.81 billion in July 2024), engineering goods (3.66% from $8.72 billion in July 2023 to $9.04 billion in July 2024) and drugs & pharmaceuticals (8.36% from $2.13 billion in July 2023 to $2.31 billion in July 2024), which together accounts for a significant value of the country’s non-petroleum and gems and jewellery exports.

Other goods categories that registered growth in exports during the month include meat, dairy & poultry products (56.18%), tobacco (39.9%), tea (21.79%), spices (13%), readymade garments of all textiles (11.84%), carpet (10.53%), plastic & linoleum (8.84%), iron ore (7.73%), etc.

"A widening in the oil as well as non oil deficit expanded the merchandise trade deficit in July 2024 relative to July 2023. The higher oil import bill reflects higher volumes and global prices, as well as a possible decline in discounts," said Aditi Nayar, chief economist and head Research and Outreach, ICRA Ltd.

Noting that the value of gold imports has been rather steady at around $3-3.4 billion each month in April-July 2024, Nayar said the lower duties after the Union Budget may raise the value of gold imports in the next few months. ICRA forecasts the merchandise trade deficit at around $11-13 billion in Q1 and $13-15 billion in Q2 FY2025.

Meanwhile, the top five export destinations, in terms of change in value, exhibiting positive growth in July 2024 vis-à-vis July 2023 are Netherland (29.18%), the USA (3.15%), Tanzania Rep (53.14%), Singapore (14.28%), and Mexico (25.91%).

The services trade is captured by the Reserve Bank of India (RBI), which is yet to release the July 2024 data. However, according to the commerce ministry’s estimates, India’s services exports for July 2024 are likely to be $28.43 billion, compared to $26.22 billion in July 2023. The estimated value of services imports for July 2024 is $ 14.55 billion, compared to $13.74 billion in July 2023.