India’s merchandise exports edged higher by over 5% in April

India’s exports during April rose by 5.17 per cent to $25.91 billion from $24.64 billion worth of merchandise shipped out during the corresponding month of last year even as the trade deficit widened due to high crude oil prices.

According to the data released by the Ministry of Commerce and Industry on Tuesday, engineering goods, organic and inorganic chemicals and drugs and pharmaceuticals showed a high growth rate of export.

“Non-petroleum and non-gems and jewellery exports in April 2018 were valued at $19.80 billion as against $17.72 billion in April 2017, an increase of 11.73 per cent,” the ministry said in a statement.

As per the data, the country’s imports during the month under review rose by 4.60 per cent to $39.63 billion in April 2018 from $37.88 billion in the like period of 2017.

Segment-wise, oil imports during April 2018 jumped by 41.49 per cent to $10.41 billion from $7.36 billion imported during April 2017.

“In this connection it is mentioned that the global Brent prices ($/bbl) have increased by 35.20 per cent in April 2018 vis-à-vis April 2017 as per World Bank commodity price data,” the statement said.

“Non-oil imports during April 2018 were estimated at $29.21 billion which was 4.30 per cent lower than non-oil imports of $30.53 billion in April 2017.”

Consequently, India’s merchandise trade deficit widened to $13.72 billion during last month as against $13.25 billion in the corresponding period the previous year.

“The merchandise trade deficit increased modestly to $13.7 billion in April 2018 from $13.2 billion in April 2017, with a contraction in imports of gold and precious and semi precious stones, and electronic goods, allaying the impact of higher crude oil prices,” said Aditi Nayar, Economist at ICRA.

“Nevertheless, the continued rise in the crude oil price in the ongoing month does not augur well for the upcoming print of the merchandise trade deficit.”

In another data point, the Reserve Bank of India (RBI) said that the trade balance in services for March, 2018 was estimated at $6.55 billion. The central bank’s data comes out with a lag of around 45 days.

“Taking merchandise and services together, overall trade deficit for April-March 2017-18 is estimated at $80.61 billion as compared to $41.79 billion during April-March 2016-17,” the statement added.