India's trade deficit fell to an eight-month low in May, along with limited domestic demand for gold and oil as the second wave of the coronavirus hit the nation and lockdown-like restrictions continued in various states, official data released on Wednesday, June 2, showed.
Even though the trade deficit widened, it was much lower than in May 2019. The deficit was the lowest since September 2020 when it was $2.7 billion.
Apart from this, the data also reflected that exports remained robust in the month of May led by petroleum products, engineering goods, and gems and jewellery.
India's merchandise exports rose 67.39% year-on-year to $32.21 billion in May, while imports grew 68.54% to $38.53 billion. As per the latest updates, India's goods exports grew 195.7% on year in April, reported The Economic Times.
The trade deficit widened to $6.32 billion in May 2021 from $3.62 billion in May 2020, as per the preliminary data released by the commerce and industry ministry showed.
Further, the imports rose to 68.54 per cent on-year. On a sequential basis, imports were down 18.66 per cent, and fell 17.47 per cent as compared to May 2019.
According to Aditi Nayar, who works as a chief economist at ICRA, considerable moderation in merchandise imports in May as compared to April is on account of a drastic fall in gold imports, as well as a dip in oil imports, reported Business Standard.
Trade deficit hit an eight-month low and narrowed to $6.32 billion, as compared to $15.1 billion in April and $16.84 billion in May 2019. However, it grew 74.69 per cent on-year from $3.62 billion in May 2020.
Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said that growth in labour-intensive sectors such as cereal preparations and miscellaneous processed item, gems and jewellery, engineering goods, marine products, among others, augurs well for the job scenario, which is most relevant in the current context.