Trade Deficit Widens As India's Imports Rise, Exports Come Down In August

India's overall exports, including both merchandise and services, totaled USD 65.4 billion in August 2024, reflecting a 2.4 per cent decline from USD 67.0 billion in the same month last year, according to data released by the Commerce Ministry on Tuesday.

The decline in merchandise goods exports from USD 38.28 billion to USD 34.71 billion was offset by a rise in service exports from USD 28.71 billion to USD 30.69 billion during the month.

In comparison, India's overall exports for July 2024 were USD 62.42 billion. For the first five months of the 2024-25 fiscal year (April-July), total exports reached approximately USD 328.86 billion, marking a 5.35 per cent increase year-on-year. The government remains optimistic about achieving the full-year export target of USD 800 billion.

Imports also increased year-on-year in August, as well as in July and June. The combined merchandise and services imports rose from USD 77.39 billion to USD 80.06 billion, a 3.45 per cent increase. This led to a widening trade deficit, which grew from USD 10.39 billion to USD 14.66 billion in August.

In the fiscal year 2023-24, India set a record with exports totaling USD 778 billion, up from USD 776.3 billion in 2022-23. Service exports increased from USD 325.3 billion to USD 341.1 billion, while merchandise exports saw a slight decline from USD 451.1 billion to USD 437.1 billion.

The government’s Production Linked Incentive (PLI) schemes, introduced across various sectors including electronics, aimed to boost global competitiveness, attract investments, and enhance exports. These measures appear to be yielding positive results.

Overall imports decreased from USD 898.0 billion in 2022-23 to USD 853.8 billion in 2023-24, contributing to a significant improvement in the trade deficit, which narrowed from USD 121.6 billion in 2022-23 to USD 75.6 billion in 2023-24.

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