Trade gap widens to five-year high

India’s trade deficit widened to a more than five year high of $18.02 billion in July, the trade ministry said on Tuesday, driven largely by a surge in oil imports.

Although the country’s exports rose by 14.32 per cent to $25.77 billion in July compared to $22.54 billion in the year-ago month mainly on account of better performance of gems and jewellery sector as well as petroleum products.

The trade data released by the commerce ministry on Tuesday also revealed that merchandise imports during July were valued at $43.79 billion, a growth of 28.81 per cent compared to $33.99 billion in the year ago period.

The sharp surge in imports led to worsening of trade deficit to $18.02 billion in the reporting month as against a deficit of $11.45 billion during July 2017.

Gold imports surged by 40.94 per cent in July to $2.96 billion compared to $2.102 billion in July 2017.

As regards exports, the outward shipments of petroleum products surged from $3 billion in July last year to $3.9 billion, showing a growth of about 30 per cent.

Export of gems and jewellery was up 24.62 per cent to $3.18 billion. In June, the trade deficit stood at $16.6 billion. Merchandise exports last month rose to $25.77 billion from a year ago, while imports rose 28.81 percent to $43.79 billion, the Ministry of Commerce and Industry said.