India Trade Balance Posts Unexpected Surplus After 18 Years

India’s trade balance returned to a surplus in June after 18 years, as a decline in imports was sharper than exports.

Exports contracted 12.4% from a year earlier, while imports declined 47.6%, leaving a trade surplus of $790 million, according to data released by the Commerce Ministry Wednesday. The balance was last in surplus in March 2002.

India Trade Balance Posts Unexpected Surplus After 18 Years

Key Insights

  • The median estimate in a Bloomberg survey of economists was for a deficit of $4 billion
  • Twelve of the country’s top 30 export items showed growth in June, compared with only four in May, as a reopening of economies around the world stoked demand for goods
  • The decline in imports were led by gold, which dropped 77.4% in June to $608.7 million
  • Shrinking imports already helped India post a rare current-account surplus in the January-March quarter helped by a lower trade deficit then. That’s a small consolation for an economy headed for its first contraction in more than four decades amid the Covid-19 pandemic
  • A new wave of coronavirus infections in economies around the world is a risk, and could leave little room for demand recovery

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  • For the full statement on foreign trade, click here

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