Chennai: The merchandise trade deficit narrowed both yearly and sequentially in September to $19.37 billion, as imports declined more than exports in a gloomy global trade scenario.
The merchandise trade deficit at $19.37 billion was significantly lower than $27.98 billion in the same month last year and a 10-month high of $24.16 billion in August 2023.
Merchandise exports in September were down 2.6 per cent to $34.47 billion against $35.39 billion in September 2022. Meanwhile, merchandise imports were down 15 per cent to $53.84 billion compared to $63.37 billion in the same month last year. In the first half of the fiscal, exports contracted by 8.77 per cent and imports 12.23 per cent.
While overall exports which combine merchandise and services exports was down by 1.2 per cent to $63.84 billion and overall imports were down 13.67 per cent to $68.75 billion. The services trade surplus for April-September was $75.67 billion as against $65.49 billion last year.
"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. The narrower-than-expected merchandise trade deficit print augurs well for the current account deficit for Q2 FY2024, although it is expected to enlarge vis-à-vis the Q1 levels. Crude oil price volatility amidst geo-political tensions remains a risk to the CAD outlook for H2 FY2024," said Aditi Nayar, chief economist, ICRA.
In September exports of 12 of the 30 key sectors exhibited positive growth and these include iron ore, oil meals, ceramic products and glassware as well as cotton yarn/fabric, made-ups, and handloom products.
In the case of merchandise imports, 20 out of 30 key sectors exhibited negative growth in September and these included silver, cotton raw and waste, fertilisers, transport equipment, and coal, coke and briquettes.
