Trade deficit narrows to $13.43 billion in July2 min read . Updated: 14 Aug 2019, 10:34 PM IST
- Exports rose 2.25% to $26.33 bn, while imports fell by 10.43% to $39.76 bn
- Oil imports fell 22% to $9.6 billion, non-oil imports fell by 5.92% to $30.16 billion
NEW DELHI : India’s exports grew by 2.25% to $26.33 billion in July, government data showed on Wednesday. Imports, however, slipped by 10.43% to $39.76 billion, narrowing trade deficit to $13.43 billion in July.
The deficit was $18.63 billion in July last year.
Export sectors that recorded positive growth in the last month include chemical, iron and pharmaceuticals.
Shipments of gems and jewellery, engineering goods, petroleum products recorded negative growth, according to the data.
Oil imports declined 22.15% to $9.6 billion, and non-oil slipped by 5.92% to $30.16 billion.
Cumulatively, during April-July 2019, exports dipped 0.37% to $107.41 billion, while imports were contracted by 3.63% to $166.8 billion.
Gold imports dipped 42.2% to $1.71 billion in July.
Separately, India’s annual wholesale price inflation in July eased to a 25-month low of 1.08%, indicating manufacturers are losing their power to raise prices as an economic slowdown deepens.
Manufacturing inflation, which contributes around 64% to the wholesale price index, rose just 0.34% in July from a year earlier, compared with 0.94% in June and 4.53% in July 2018.
As a result, headline WPI inflation weakened more than expected from 2.02% in June. Analysts had expected it to dip to 1.93%.
The vehicle industry—which represents 60% of the country’s manufacturing output once components-makers are included—is in a deep crisis.
Domestic passenger vehicle sales in July dived at the steepest pace in nearly two decades, an auto industry body said on Tuesday, as a financing crunch helped to choke demand.
The weak wholesale inflation data reinforced views that the Reserve Bank of India (RBI) will cut interest rates for a fifth straight time at its next policy meeting in October in a bid to stimulate consumption. However, while acknowledging another easing is likely, London-based economic research consultancy Capital Economics believes the underlying inflation will rise before long, highlighting the risks of aggressive monetary loosening.
Food prices could go up in coming months, while core consumer inflation has started to rise again, the consultancy said in a note.
Wholesale food prices in July rose 4.54% year-on-year, compared with a 5.04% jump a month earlier, the data showed, while wholesale prices of fuel products, including petrol, diesel and cooking gas, fell. That could help the economy as India meets nearly 80% of its oil demand through imports.
India’s retail inflation, the main gauge used by the central bank to monitor prices and decide on whether to change its benchmark repo rate, eased in July to 3.15%, data showed on Tuesday, remaining below the central bank’s 4% medium-term target for a 12th straight month.