Trade Deficit Widens In March As Exports And Imports Fall
India's trade deficit widened in March as exports fell at a faster rate than imports.
India's trade deficit widened to its highest in three months in March as exports fell at a faster rate than imports.
The trade deficit rose to $19.73 billion in March from $17.43 billion in February, according to data shared by the Ministry of Commerce and Industry at a media briefing.
Exports fell 13.9% year-on-year to $38.38 billion in March. Still, exports rose to the highest in nine months.
Imports fell 7.9% year-on-year to $58.11 billion. Imports rose to a three month high.
On a sequential basis, exports rose 13.3% in March, and imports rose 13.3%.
Non-petroleum and non-gems and jewellery exports in March were $30.20 billion, 2.5% lower than a year earlier.
Non-petroleum, non-gems and jewellery (gold, silver and precious metals) imports stood at $35.60 billion, 4.7% lower than an year ago.
Trade During FY23
For the full fiscal, merchandise exports rose 6.03% to $447.5 billion- the highest on record. Imports rose 16.5% to $714.24 billion.
Services exports rose 26.79% to $322.7 billion- projected to be the highest on record, while imports rose 21.04% to $21.04%.
Overall trade deficit widened to $122 billion in FY23 from $83.5 billion in the previous year.
Although India’s merchandise exports rose by 6% to touch a record $447.5 billion in FY23, non-oil exports declined marginally by 0.5% following slackening external demand owing to the global slowdown in H2 FY23 as well as the moderation in global commodity prices, said Aditi Nayar, chief economist at ICRA.
These concerns are set to exacerbate in FY24 and are expected to lead to a deeper contraction in India’s merchandise exports during the fiscal, she said. This will weigh on the performance of the manufacturing sector and act as a drag on GDP growth.
While imports are also expected to contract in FY24, after rising by 16.5% to $714.2 billion in FY23, the extent of the contraction would be limited as India’s domestic demand is expected to outperform external demand, Nayar said.
This is expected to weigh on the merchandise trade deficit and accentuate the CAD to about 2.5% of GDP in FY24 from 2.2% expected in FY23, according to ICRA estimates.
Key Merchandise Exports
Engineering goods exports stood at $10.2 billion, down 7.5% year-on-year.
Petroleum product exports were at $5.4 billion, 44.6% lower than a year earlier.
Gems and jewellery exports were at $2.7 billion, 27.4% lower than the previous year.
Organic and inorganic chemical exports were at $2.7 billion, 5.9% lower than last year.
Drugs and pharmaceutical exports were at $1.9 billion, 4.2% higher compared to the previous year.
Key Merchandise Imports
Petroleum, crude and product imports were down 23.8% over a year ago at $16.1 billion.
Imports of coal, coke and briquettes were 24.9% lower than a year ago at $3.4 billion.
Electronic goods imports were at $7.2 billion, down 16.8% over the previous year.
Machinery, electrical and non-electrical goods were at $4 billion, up 16% over the previous year.
Gold imports stood at $3.3 billion, 216.75% higher than a year earlier.