This left a trade deficit of over $20 billion mainly because of surging international oil prices due to the Ukraine war
India’s merchandise exports in April surged 30.7% at $40.19 billion compared to $30.75 billion in the corresponding period last year, but imports also jumped by 30.97% to $60.30 billion, leaving a trade deficit of over $20 billion mainly because of surging international oil prices due to the Ukraine war, according to official data.
India, which imports 85% of crude oil it processes, bought petroleum worth $20.19 billion in April compared to $10.76 billion in the same month last year, registering a growth of over 87.5%, according to trade data released by the commerce ministry on Friday.
Although India’s exports of petroleum products also surged about 128% ($8.26 billion) in the month, in terms of value, imports surpassed it by several times. Due to the war in eastern Europe and consequent supply squeeze, India’s average crude oil import price (Indian basket) in April 2022 jumped 62.4% to $102.97 a barrel from $63.40 per barrel in April 2021.
India’s gross petroleum imports in 2021-22 were $143.4 billion, nearly double than $77 billion in the previous fiscal year, according to Petroleum Planning and Analysis Cell’s (PPAC) provisional data.
Besides petroleum products, other items that raised India’s mercantile exports in April 2022 included electronic goods (71.69%), cereals (60.83%), coffee (59.38%), processed food (38.82%) and leather product (36.68%), according to a statement of the commerce ministry. “Services [exports] performed extremely well to reach USD 27.60 bn, which is an increase of 53% over April 2021,” it said.
The data for trade in services is an extrapolation as the latest available data for the services sector released by the Reserve Bank of India (RBI) for March this year. The data for April 2022 is an estimation, which will be revised based on RBI’s subsequent release, the statement said.
India’s trade balance in services is positive by $12.3 billion (a 42.6% year-on-year jump) with the estimated value of services import for April 2022 being $15.57 billion exhibiting a positive growth of 61.87% vis-a-vis April 2021 ($9.62 billion).
Taking together goods and services, India’s overall exports in April 2022 is estimated at around $67.79 billion, exhibiting a positive growth of 38.9% over the same period last year. Overall imports in April 2022 are estimated at $75.87 billion, a 36.31% growth over the same period last year.
“Export performance in the first month of current financial year is robust in line with record performance in the last year and the government will soon announce an ambitious exports target for 2022-23 after consulting all stakeholders,” a government official said, requesting not to be named. India achieved a record $419.5 billion in merchandise exports and about $250 billion in services exports in 2021-22.
India is banking on recently signed free trade agreements (FTAs) with the United Arab Emirates (UAE) and Australia to boost its exports. It is also aggressively promoting wheat exports after supply disruptions of the cereal from Ukraine.
Amid rising demand for food grains globally, the commerce ministry has decided to tap Morocco, Tunisia, Indonesia, Philippines, Thailand, Vietnam, Turkey, Algeria, and Lebanon to boost wheat exports from India, the official said.
The government will send trade delegations to these markets for exploring possibilities of boosting wheat exports, he said. “India has set a target of a record 10 million tonnes of wheat in 2022-23 amid rising global demand for the grain globally,” he added.
According to estimates by the Directorate General of Foreign Trade (DGFT), India exported a record seven million tonne (MT) of wheat in 2021-22 valued at $2.05 billion. Out of the total shipment, around 50% of wheat was exported to Bangladesh that year. Egypt, which is one of the world’s biggest importers of wheat, has agreed to source wheat from India.