India's merchandise exports in June rose by 16.78 per cent year-on-year to $37.94 billion while the trade deficit ballooned to a record $25.63 billion on account of a steep increase in gold and crude oil imports, according to the government's preliminary data released on Monday.
The export growth in June moderated from 20.55 per cent in May and 48.34 per cent in June 2021.
During the month under review, exports of engineering, pharmaceutical and plastic products recorded negative growth.
Imports expanded by 51 per cent to $63.58 billion in June compared to the year-ago month, the data showed.
The trade deficit stood at $9.61 billion in June 2021.
Cumulative exports in April-June 2022-23 rose by about 22.22 per cent to $116.77 billion while imports increased 47.31 per cent to $187.02 billion during the period.
The trade deficit during the first three months of this fiscal widened to $70.25 billion from $31.42 billion in the year-ago period.
Crude oil imports in June soared 94 per cent to $20.73 billion. Coal and coke imports surged to $6.41 billion in June 2022 as against $1.88 billion in June 2021.
Gold imports during the month rose sharply by 169.5 per cent to $2.61 billion.
On the exports front, outbound shipments of petroleum products rose by 98 per cent to $7.82 billion. Gems and jewellery shipments increased by 19.41 per cent to $3.37 billion.
Commenting on the numbers, ICRA Ltd Chief Economist Aditi Nayar said that despite an expected fall in gold imports, the merchandise trade deficit widened further to a "worrying" level in June, with a sequential dip in exports.
"With a steady uptick in the size of the merchandise trade deficit over the course of the quarter, we expect the current account deficit to more than double to $30 billion in Q1 FY'2023, from the modest $13 billion in the previous quarter," she said.
The export growth was constrained by the base effect as well as the contraction posted by engineering goods, drugs and pharma, cotton yarn, she added.
"We expect the merchandise trade deficit to remain in excess of $20 billion in the remainder of 2022. However, robust services surpluses will partly absorb the shock. We expect the current account deficit to print in the range of $100-105 billion in FY'2023," Nayar said.
FIEO President A Sakthivel demanded further push to value-added exports, augmenting container manufacturing, and developing an Indian shipping line of global repute.