Chennai, July 5 : High crude prices and relatively strong domestic demand weighed on India's June trade deficit at $25.6 billion, said Kotak Securities. In a research report, Kotak Securities said with risks of global slowdown and correction in global commodity prices, exports could soften further while imports hold on implying risks of a wider trade deficit. According to the report, exports in June increased by 16.8 per cent to $37.9 billion (May: $38.9 billion) while declining by 2.6 per cent month-on-month. The non-oil exports moderated marginally to $30.1 billion (May: $30.4 billion) and have been declining. The ban on wheat exports and export duty hikes on iron and steel would have played out in June exports too. While the details for June will be released later, wheat export stood at $850 million and iron and steel exports at $3.6 billion in May, Kotak Securities said. Metal prices have seen sharp corrections since April and will feed into the exports over the next few months. Overall, with risks of a global slowdown and recent correction in commodity prices, exports will be under some adverse risk. The report said imports were a reflection of high energy costs-oil, coal- as well as strong domestic demand. Imports in June increased to $63.6 billion (May: $63.2 billion) "a record high" led by an increase in oil imports to $20.7 billion (May: $19.2 billion). Overall, trade deficit continued to widen at $25.6 billion. (May: $24.3 billion) and 1QFY23 deficit stood at $70.3billion led by strong imports, Kotak Securities said. "With exports at the risk of slowing down due to risks of (1) a global growth slowdown led by the US and (2) correction in global commodity prices, and imports likely to stay relatively stable, India's trade deficit is likely to remain wide. Even with our FY2023E CAD/GDP (current account deficit/gross domestic product) estimate at three per cent (assuming crude oil price average at $105/bbl), we see upside risks to our estimate," Kotak Securities said. Further, with global monetary policy tightening still underway, without visibility of an inflection point, capital flows will remain in the risk-off zone which will weigh on the overall Balance of Payments (BOP). Expecting the US dollar at Rs 78.5-80 in the near term, Kotak Securities said, the rupee held up well against the former. However, (1) widening trade deficit, (2) narrowing of interest rate differentials, and (3) Reserve Bank of India's foreign exchange intervention strategy (sell spot along with buy-sell swaps) leading to a collapse in forward premiums, led to relatively sharp depreciation in the rupee recently, the Kotak Securities report said. Citing the uncertainty in the global macro environment, the report said the Indian rupee is likely to be under pressure, especially if crude prices remain elevated and global growth slows down. /IANS