• Ministry of Commerce reported that India’s trade deficit expanded to a six-month high of $15.4 billion in May, with import growth outpacing export growth following a 37% jump in gold imports. Exports grew 3.93% in the month of May, while imports rose 4.31%.

BACKGROUND:

• Out of six months in the past 7 months, the exports have been in low single digits which barred March when it grew in double digits. Rising crude oil prices, amid sanctions on Iranian oil imports, could further increase imports and put pressure on India’s current account deficit.
• China’s exports in May increased by 1.1%, while imports fell by 8.5%. This lead to a significantly higher trade surplus of $41.65 billion than analysts projected.
• The escalating trade war between the US and China have cast a shadow on India’s prospects for higher exports.