Ira Singh
Khabar Khabaron Ki,15 June’24
India’s export sector has shown remarkable resilience, with significant contributions from sectors such as textiles, pharmaceuticals, and engineering goods. This robust performance is largely attributed to the global economic recovery, strategic government incentives aimed at boosting manufacturing and domestic inflation easing. However, increase in gap between export and import (due to the rising import bill, particularly for oil and gold) continues to remain a challenge for India’s growth story.
According to official data released on Friday, India’s trade deficit widened to a seven-month high of $23.78 billion in May from $19.1 billion recorded in the previous month, driven by a jump in import of oil and gold, even though exports posted a healthy over 9% growth. India’s exports increased by 9.1% year-on-year to $38.13 billion in May while imports jumped to $61.91 billion, registering a growth of 7.7% when compared with the same month last year.
The growth in exports was led by a healthy double- digit increase in the shipment of electronic goods, petroleum products, drugs and pharmaceuticals, plastics & linoleum and meat & dairy products, stated report.
According to the report published by the Ministry of Commerce and Industry, the United States, Netherland, the United Arab Emirates, Malaysia and the United Kingdom led the increase in shipments from India.
Commerce Secretary Sunil Bharthwal reportedly quoted as saying, easing in inflation in developed economies have boosted demands. “We hope this trend should continue this year and also hope that there should be no more geopolitical conflicts and no more disruptions in major global shipping routes,” he added.
The widening trade deficit underscores India’s ongoing struggle to balance its trade equation. Despite the encouraging export numbers, the country’s heavy reliance on imports of essential commodities like oil and gold continues to strain its economic stability. This dependency makes India vulnerable to global price fluctuations, impacting the overall trade balance, believe experts.