InvestorQ : How did you find the trade data for the month of May 2022?
Anamika Sodhani made post

How did you find the trade data for the month of May 2022?

Answer
image
Angel dcosta answered.
1 month ago
Follow

On 02nd June, the Ministry of Commerce announced the provisional merchandise trade numbers for the month of May 2022. The actual numbers will be out in the middle of the month. This is a new practice that the government has just started in the last one year to give an early stage picture of the trade for the previous month. Exports for May 2022 were up 15.46% at a level of $37.29 billion.

India witnessed record exports of $422 billion in the previous fiscal year 2021-22. This was on the strength of export of petroleum products, electronic goods and chemicals. IN the last one year, India has boosted its exports of electronics, chemicals and textiles, thanks to the production linked incentive scheme or the PLI scheme. On the flip side, it was not the exports that saw solid growth, but imports actually grew much stronger.

For May 2022, merchandise imports were up 56.14% at $60.62 billion. As a result, the merchandise trade deficit widened further to $23.3 billion for May 2022. This is fairly close to the peak trade deficit seen by the Indian economy and promises to push full year trade deficit for FY23 close to $250 billion. However, what could be more disconcerting is the mix of the import basket. Here are the details.

Petroleum and crude oil imports for May 2022 surged by 91.6% yoy at $18.14 billion. This was largely on the back of a surge in crude oil prices and India’s relying on imported oil for 85% of daily needs. Secondly, with the domestic shortage of coal and coking coal, the total import bill for coal, coke and briquettes stood at a lofty $5.33 billion. Finally, gold imports for May 2022 surged back to $5.82 billion on higher jewellery stock demand.

For the Indian economy ,the one factor to watch out for is the import cover available on the forex reserves of the RBI. India is expected to close the current fiscal year FY23 with total imports in the range of $720 to $750 billion. With forex reserves having recently depleted to $596 billion, the average cover is 9 months of merchandise imports. That could be the real worry and steps are required to rectify this situation at the earliest.

4 Views