New Delhi June 15 2023: India’s trade deficit widened last month after shrinking to a near two-year low in April as exports declined on weakening demand for goods in most parts of the world.
The gap between exports and imports rose to $22.12 billion last month, the Trade Ministry said on Thursday. The reading is higher than a deficit of $15.24 billion in April.
Exports fell 10.3% from a year earlier to $34.98 billion in May due to sluggish demand from major buyers overseas, while imports stood at $57.10 billion, down 6.6%.
The wider trade gap highlights the challenges for the economy trying to recover from the scars of the pandemic and higher borrowing costs. It is a risk for the nation’s current account deficit, which can affect investor sentiment and hurt appeal of the local currency.
The services sector is providing some reprieve for now. India’s services exports are booming owing to a sharp jump in information technology and business consulting work. It is estimated to rise to $25.3 billion in May.
