India: June Delivers First Merchandise Trade Surplus in 18 Years

(17 July 2020) In June, India registered its first merchandise trade surplus in nearly two decades as the COVID-19 outbreak hit the domestic demand harder than external demand. The June surplus of US$790 million was the culmination of months of falling trade figures amid border tensions between India and China and slowing global demand. 

• Exports declined 12.4% to US$21.9 billion in June compared to decline of 36.5% in May, led by falling exports of gems and jewelry (-50.1%) petroleum products (-31.6%), textiles (-34.8%), and engineering goods (-7.5%).
• Imports contracted sharply by 47.6% to US$21.1 billion in June after contracting 51.1% in May, with imports of gold (-77.4%), petroleum products (-55.3%), and electronic goods (-34.1%) leading the downward trend.

On the domestic front, national and regional level coronavirus lockdowns, government policies towards import substitutions, and an uncertain employment scenario will likely put more pressure on imports in the months ahead.