The contraction in India's exports narrowed further in July, on a sequential basis, as the country shipped out merchandise worth $23.64 billion.

The contraction, caused by Covid-19 pandemic, narrowed down to (-) 10.12 per cent in July from (-) 12.41 per cent in June.

In terms of sequential movement, the country's merchandise exports in June stood at $21.91 billion.

On a YoY basis, the country's exports fell during the month under review to $ 23.64 billion from $26.33 billion reported for the corresponding period of the previous year.

"Non-petroleum and Non-Gems and Jewellery exports in July 2020 were $20.37 billion, as compared to $19.70 billion in July 2019, registering a positive growth of 3.40 per cent," the Ministry of Commerce and Industry said in a statement.

"Non-petroleum and Non-Gems and Jewellery exports in April-July 2020-21 were $64.29 billion, as compared to $79.81 billion for the corresponding period in 2019-20, which is a decrease of (-) 19.45 per cent."

Similarly, decline in India's imports narrowed down in July. It declined by (-) 28.40 per cent to $28.47 billion in July from $39.76 billion reported for the corresponding month of 2019.

In June imports declined by (-) 47.59 per cent to $21.11 billion in May from $40.29 billion reported for the corresponding month of 2019.

"Oil imports in July 2020 were $6.53 billion (Rs 48,975.09 crore), which was 31.97 per cent lower in Dollar terms (25.86 per cent lower in Rupee terms), compared to $9.60 billion (Rs 66,056.77 crore) in July 2019," the statement said.

"Non-oil imports in July 2020 were estimated at $21.94 billion (Rs 1,64,524. 47 crore) which was 27.26 per cent lower in Dollar terms (20.72 per cent lower in Rupee terms), compared to $30.16 billion (Rs 2,07,522.94 crore) in July 2019."

Besides, the non-oil and non-gold imports were $20.15 billion in July 2020, recording a negative growth of (-)29.15 per cent, as compared to $28.45 billion in July 2019.

Consequently, India's trade deficit narrowed to $4.83 billion on a year-on-year basis in July from $13.43 billion reported for the corresponding month of last year.

"The rare trade surplus seen in June 2020 predictability vanished with some recovery in merchandise imports in July 2020, which stamped out the further improvement in merchandise exports," said Aditi Nayar, Principal Economist, ICRA.

"This trend is likely to strengthen in the coming months, as demand for non-oil non-gold imports starts to normalise, gold imports gather steam around the festive or marriage months, and crude oil demand and prices stabil ise at a moderate level."

According to EEPC India Chairman Mahesh Desai: "It is a matter of relief that the sharp slide in India's exports has been arrested in July, 2020 even as the Covid-19 pandemic continues to create health and economic disruptions in the world."

"Engineering exports are amongst a handful of sectors which managed to post a positive trend of 8.6 per cent growth as global demand for essential metals and other related items has started bouncing back."