India’s May trade gap narrows as exports rise; U.S. trade talks in focus
By Shivangi Acharya and Manoj Kumar
NEW DELHI, June 15 (Reuters) – India’s commodity trade deficit narrowed marginally in May as higher exports covered part of the import bill and firms faced unstable energy prices, disruptions in the Middle East and ongoing trade negotiations with the United States.
According to a Reuters survey, the commodity trade deficit narrowed to $28.21 billion in May from $28.38 billion in April; this was below economists’ forecast of $28.72 billion.
Exports of goods rose to $45.2 billion in May from $43.56 billion the previous month, while imports rose to $73.41 billion in April, compared to a six-month high of $71.94 billion, according to government data released on Monday.
The data underscores pressure for India to maintain exports and contain import costs as it seeks greater access to the US market; From April to May, goods exports remained almost flat at $17.29 billion compared to $17.21 billion in the previous year.
US Trade Representative Jamieson Greer will visit India from June 23 to 24 for further talks on an interim trade agreement, Commerce Secretary Rajesh Agrawal said.
“Talks with USTR will center around putting the finishing touches to our interim agreement,” Agrawal told reporters, adding that New Delhi would seek clear answers on USTR’s proposed new tariffs as part of its Section 301 investigation while finalizing the agreement.
New Delhi wants a trade deal with the US that would give preferential tariff access to its exports, but talks have been complicated by US investigations into alleged overcapacity in sectors such as textiles and steel.
Trade is expected to feature prominently in talks between US President Donald Trump and Indian Prime Minister Narendra Modi on the sidelines of this week’s summit in France, but a deal is not expected to be finalised.
Relations have been strained by U.S. tariffs on Indian goods and Trump’s repeated claims last year that he helped end India’s conflict with Pakistan, denied by New Delhi.
Sentiment has picked up in recent weeks after Commerce Minister Piyush Goyal said earlier this month that the first tranche of the bilateral trade deal could be completed by mid-July.
US-IRAN PACT REDUCES PRESSURE
India’s trade figures came after US and Iranian officials said they had agreed on a framework to end their war, halt the US blockade of Iran and reopen the Strait of Hormuz, a preliminary agreement that has sent oil prices crashing.
India imports more than 80 percent of its crude oil and about 60 percent of its cooking gas, mostly from the Middle East; Therefore, the expected reopening of the Strait of Hormuz could ease the import bill and exporters’ freight, insurance and energy costs.
