Trade deficit eases as imports plunge
NEW DELHI : India’s trade deficit narrowed in September as imports plunged and exports continued to slide amid slowing demand in the West and China. Goods exports slipped marginally by 2.59% to $34.47 billion compared to $35.39 billion in September 2022, while imports fell a steeper 15% to $53.84 billion against $63.37 billion a year earlier. Consequently, the trade deficit fell to $19.37 billion, down over 30% from $27.98 billion a year ago, commerce ministry data showed.
“India’s merchandise trade deficit compressed considerably to $19.4 billion in September 2023 from $28 billion in the year-ago month, with a sharp contraction in imports reflecting the impact of lower commodity prices," said Aditi Nayar, chief economist, ICRA Ltd. “The narrower-than-expected merchandise trade deficit print augurs well for the current account deficit (CAD) for Q2 FY24, although it is expected to enlarge vis-à-vis the Q1 levels. Crude oil price volatility amid geo-political tensions remains a risk to the CAD outlook for H2 FY2024," Nayar added.
Export restrictions, particularly on items such as cereals and rice, have taken a toll on the country’s outbound trade. Exports in the ‘other cereals’ category declined over 50% in September compared to last year. Rice exports fell 25%, leather & leather products 21.2%, spices 19.5%, gems & jewellery 16%, and petroleum products exports nearly 11%.
Notably, electronic goods exports have been rising so far, fell by 3.69%, and tea slipped by 3.03%. Meanwhile, engineering goods exports rose 6.79%; ceramic products & glassware 50.49%; cotton yarn and handloom products 27.39%; meat, dairy & poultry products 19.4%; and drugs & pharmaceuticals exports 9.01%. Commerce secretary Sunil Barthwal said: “Last
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