India recorded a trade surplus of $0.79 billion in June as coronavirus pandemic hit imports. In the corresponding month of last year, India had a deficit of $15.28 billion. The last time India had a positive balance on the trade account was in January 2002 when it had a surplus of $10 million.
Exports declined by 12.41 per cent to $21.91 billion in June mainly due to drop in shipments of petroleum, textiles, engineering goods, and gems and jewellery items, according to the data released by the Commerce and Industry Ministry on Wednesday. The exports contracted for the fourth straight month, Imports too plunged 47.59 per cent to $21.11 billion in June.
During April-June 2020, exports fell by 36.71 per cent to $51.32 billion, while imports shrank by 52.43 per cent to $60.44 billion.
The trade deficit stood at $9.12 billion during the two months of the current fiscal. Oil imports dipped 55.29 per cent to $4.93 billion in June. Gold imports in June plunged by 77.42 per cent to $608.7 million."Given the delayed recovery in imports, we expect the merchandise trade deficit to shrink to around US$10-12 billion in Q1 FY2021 from around US$ 46 billion in Q1 FY2020. However, the ongoing economic uncertainty would severely impact inward remittances, in our view. Balancing these contrasting trends, we expect a current account surplus of around US$14-16 billion in Q1 FY2021," said Aditi Nayar,Principal Economist, ICRA.
Meanwhile, the coronavirus pandemic has negatively impacted the demand not only in India but worldwide too. Even as the economy is now slowly recovering, but the continuous weeks of lockdown have kept the production down, hitting economic growth.Also read: Trump rescinds F1 visa order; international students can now take online classes