Exports rise for 4th straight month in June, Q1 trade gap at 3-quarter low

Driven by a growth in gems and jewellery, petroleum products, chemicals and leather, and a favourable base effect, India's merchandise exports rose 48.3% on year in June, though the pace of growth slowed from 69.35% in May and 195.7% in April.

Data released by the commerce and industry ministry on Thursday showed India’s goods exports rose to $32.5 billion last month amid localised restrictions to control the spread of the Covid-19 pandemic, taking the first quarter exports to $95.39 billion, an 85.88% over the corresponding period of FY21.

As per the data, 26 of the 30 major export sectors witnessed growth last month including electronics, engineering goods and labour-intensive ones such as gems & jewellery and textiles.


“The highest-ever quarterly growth in exports by more than 85% with $95 billion over FY’ 2020-21 and by about 18% over FY20 not only shows the resilience of the exports sector but also the strength of the Indian economy,” said A Sakthivel, President, Federation of Indian Export Organisations (FIEO).

Imports in June rose 98.31% to $41.87 billion, leaving a trade deficit of $9.37 billion as against a trade surplus of $0.79 billion in the same month last year. Gold imports grew 60% on-year in June compared to a whopping 790% in May.

Trade deficit during the quarter was $30.75 billion as against $9.12 billion during April-June 2020.

ICRA chief economist Aditi Nayar said that surging exports and relatively subdued gold imports in May and June dampened the aggregate trade deficit to a three-quarter low in the first quarter of FY22.

Rising mobility pushed up oil imports, whereas gold imports recorded only a modest sequential uptick despite the unlocking, given the large inventory accumulated since the tax modification in the Union Budget FY22.

Oil imports in June were $10.68 billion, 116.51% higher compared to $4.93 billion in June 2020. During April-June 2021, the imports stood at $31 billion as against $ 13.08 billion during the same quarter of the previous fiscal. Gold imports fell to $0.96 billion in June.

Prahalathan Iyer, Chief General Manager, Research & Analysis, India Exim Bank said that the cumulative export of $95.3 billion in the first three months confirms that the $400 billion target set by the government is realizable for FY 22.

“In line with the sequential recovery displayed by most high frequency indicators, non-oil non gold imports rose in June 2021, reflecting a pickup in demand with the gradual unlocking as well as the high commodity prices,” Nayar said.

Non-oil, non-gold imports-an estimate of the strength of domestic demand-increased by 94.07% year-on-year.

EEPC India Chairman Mahesh Desai said that the demand for Indian engineering items is expected to remain robust during the current financial year despite fear of a third wave of pandemic.