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Trade Of India: India’s total exports estimated to grow at 5.40% in June 2024

Context: The Ministry of Commerce released quick trade estimates.

Insights of Trade Of India 2023-24

India's total exports estimated to grow at 5.40% in June 2024_4.1

  • Exports: Total Exports: Total merchandise and services exports reached a record high of $200.3 billion in the Q1 of 2024-25.
    • Merchandise Export: Rising by 2.55% year-on-year to $35.2 billion.
    • Services Exports: Pegged at $30.3 billion for the last month, an 8.9% increase from a year ago.
    • 2023-24: Total exports hit a record $778.2 billion, up 0.42% from the previous year.
  • Imports: Rose by 5% to $56.2 billion.
  • Trade Deficit: Widened by 9.4% year-on-year (YoY).
Fact
A 2.8% increase in exports is needed to reach the $800 billion target, though geopolitical risks present challenges.
  • June’s goods exports and imports were the second highest in 10 years, after June 2022’s $42.3 billion in exports and $64.35 billion in imports.

Key Growth Drivers

  • Engineering goods: +10.3%
  • Electronics goods: +16.9%
  • Drugs and pharmaceuticals: +9.9%
  • Chemicals: +3.3%
  • Coffee: +70%

Trade during June 2024

June 2024

(USD Billion)

June 2023

(USD Billion)

Merchandise Exports 35.20 34.32
Imports 56.18 53.51
Services* Exports 30.27 27.79
Imports 17.29 15.61
Total Trade

(Merchandise +Services) *

Exports 65.47 62.12
Imports 73.47 69.12
Trade Balance -8.00 -7.00

India's total exports estimated to grow at 5.40% in June 2024_5.1

Petroleum Trade

  • Exports: Petroleum exports fell by 18.3% to $5.5 billion in June.
  • Imports: Petroleum imports rose by 19.6% to $15.05 billion.
  • Oil Deficit: Improved from a peak deficit of $13.2 billion in May, as noted by QuantEco Research economists.
About Trade Deficit
  • A trade deficit occurs when the cost of a country’s imports exceeds its exports, also known as a negative balance of trade.
  • It is calculated by subtracting the total value of a country’s exports from the total value of its imports.

Potential Causes of Trade Deficit

  • Economic growth: Increased consumer wealth leads to more overseas purchases
    • Strong economy attracts foreign investors
  • Increased government spending: Diminishes national savings
  • Exchange rate changes: Weak currency makes imports more expensive
    • Strong currency encourages more imports
  • Production limitations: Some goods can’t be produced domestically
    • Climate, natural resources, or cost factors
  • Trade policy changes: Removal of trade barriers like tariffs
    • Often shifts deficit between trading partners rather than creating it

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