India turns net exporter for first time in almost two decades; records trade surplus in June

India has managed a trade surplus for the first time in almost 18 years as imports declined faster than exports. There was decease in demand for crude oil, gold, and other goods, indicating a slowing economy. 

Since March 2020, India has seen a decrease in both imports and exports because of decline in global demand, India-China tensions, and disruption of global trade due to the pandemic.     

For June 2020, the trade surplus was estimated at US$ 790 million as against the deficit of US$ 15.28 billion in June 2019.

Merchandise exports in June 2020 stood at US$ 21.91 billion, as compared to US$ 25.01 billion in June 2019, a decline of 12.41 per cent year-on-year.

However, imports in the month were recorded at US$ 21.11 billion, down by 47.59 per cent as compared to the imports of US$ 40.29 billion in June last year.

In June 2020, Oil imports were US$ 4.93 billion, which was 55.29 percent lower, as compared to June last year, as per the data released by the Ministry of Commerce.

“Rapid Turnaround of Exports: Realising PM @NarendraModi ji’s vision of Atmanirbhar Bharat, for the first time in 18 years, India records a monthly goods trade surplus in June!” Commerce and Industry Minister Piyush Goyal tweeted.

India’s current account balance saw a small uptick at 0.1 per cent of GDP in the March quarter of the financial year 2019-20. It shrank to 0.9 per cent in FY20 from 2.1 per cent in FY19 due to lowering trade deficit.     

It is estimated that the Indian economy will shrink by 5 per cent in the current financial year 2020-21.

Whereas IMF expects the Indian economy to contract by 4.5 per cent following a longer period of lockdown and slower recovery, the World Bank says it India's GDP to contract 3.2 per cent.