In July, trade deficit reached a record high of $31 billion

3 Aug 2022 , 12:11 PM

As of July, India’s goods trade imbalance surged to a new record high of $31.02 billion, according to BVR Subrahmanyam, the commerce secretary, who spoke on August 2. The previous record high for the trade imbalance was reached in June when it was $26.18 billion. At $10.63 billion, the deficit in July 2021 was almost a third less than it was the previous month.

According to preliminary figures issued by the trade ministry, July’s merchandise imports were $66.26 billion, up from $46.15 billion in the same month of 2016. During $35.24 billion, July’s exports were “nearly steady” compared to the same month last year, according to Subrahmanyam, who spoke at a briefing.

The secretary said, “The external environment is no longer benign.” The current increase in India’s trade imbalance is a result of the high prices of commodities throughout the world. This has placed pressure on the rupee’s currency rate, which over the last several weeks has fallen to many record lows against the US dollar and first passed the 80-to-dollar threshold on July 19.

Despite setting a specific exchange rate objective, the Reserve Bank of India attempts to reduce volatility by purchasing and selling its foreign exchange reserves. India’s foreign exchange reserves are down more than $70 billion from their height of $642.45 billion, reached on September 3, 2021, as a result of its exchange rate defense.