India's Export Growth Amidst Trade Deficit Concerns

NEW DELHI: In a surprising turn of events, India's goods exports witnessed a 7.2% increase to $37.2 billion in July, marking the end of a two-month decline. However, this positive news is shadowed by a 14.7% surge in imports, reaching $64.6 billion, leading to a trade deficit of $27.4 billion, the highest since last November.

Despite a 25% drop in petrol, diesel, and jet fuel exports to $4.3 billion, this was more than compensated by significant growth in other sectors. Notably, electronics exports soared by 34%, gems & jewellery by 29%, and both engineering goods and pharma by 14% each.

Global Trade Dynamics and India's Position

The increase in exports may partly be attributed to the "frontloading" of shipments to the US ahead of potential reciprocal tariffs. Yet, data from April to July does not show a clear trend. Exports to the US during this period were 21.6% higher, amounting to $33.5 billion.

Commerce Secretary Sunil Barthwal highlighted, "Despite the uncertain global policy environment, India's exports, both goods and services, have grown substantially in July and so far this financial year. It is much higher than global export growth."