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Trade deficit shoots up 62% YoY to $25.6 billion in June

The issue has again caught the attention of the Prime Minister’s Office as the government expects the trade deficit to widen in the near term, and efforts are on to quickly address it, officials have told Moneycontrol.

July 05, 2022 / 12:56 PM IST
Representational Image.

Representational Image.

India's merchandise trade deficit rose to $25.6 billion in June 2022, 62 percent higher than June 2021 as a continuing global commodity supercycle kept the prices of key energy and metal imports high.

Data released by the Commerce and Industry Ministry on Monday showed that while exports in June rose by 16.8 percent to $37.9 billion, imports shot up by 51 percent to $63.5 billion. The resultant $25.6 billion worth of trade deficit - the difference between total exports and imports - has given the Commerce Department a new headache, an official said.

The monthly trade deficit has been rising for the past few months. It had risen from $20.4 billion in April to $23.3 billion in May earlier. "We expect the merchandise trade deficit to remain in excess of US$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 US$100-105 billion in FY2023," Aditi Nayar, Chief Economist at ICRA said.

Moneycontrol has reported that the issue has again caught the attention of the Prime Minister’s Office and efforts are on to quickly address it. With the Indian rupee depreciating against the US dollar and commodity prices remaining high, the government expects the trade deficit to widen in the near term, officials said.