India's trade deficit shrinks significantly in September 2023

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India's trade deficit shrinks significantly in September 2023

India's trade deficit shrinks significantly in September 2023

Industry News
Oct 19,23

The country's goods exports saw a slight decrease of 2.59%, dropping to $34.47 billion from $35.39 billion in September 2022.

India's trade deficit shrinks significantly in September 2023

India's trade imbalance showed improvement in September due to a sharp decline in imports and a continued decrease in exports, influenced by reduced demand in Western countries and China.

The country's goods exports saw a slight decrease of 2.59%, dropping to $34.47 billion from $35.39 billion in September 2022. In contrast, imports experienced a significant decline of 15%, falling to $53.84 billion compared to $63.37 billion the previous year. Consequently, the trade deficit decreased to $19.37 billion, marking a decrease of more than 30% from $27.98 billion in the same month the previous year, as per data from the commerce ministry.

Aditi Nayar, chief economist at ICRA Ltd, stated, “India's merchandise trade deficit shrank considerably to $19.4 billion in September 2023 from $28 billion in the same month last year, primarily due to a drastic reduction in imports attributed to lower commodity prices." She also mentioned that the smaller-than-anticipated merchandise trade deficit bodes well for the current account deficit (CAD) in the second quarter of the financial year 2024. However, she cautioned that geopolitical tensions causing volatility in crude oil prices remain a risk to the CAD outlook for the second half of the fiscal year 2024.

Source: Mint