India’s Trade Deficit Narrows in November on Falling Imports

India’s trade deficit narrowed last month as imports outpaced a drop in exports, amid lingering weakness in demand in an economy that’s entered a recession.

The gap between outbound and inbound shipments in November was $9.96 billion, compared with $12.75 billion a year ago, according to preliminary data released by the trade ministry Wednesday. Imports dropped 13.3% to $33.39 billion, compared with a 9.1% fall in exports.

Key Insights

  • The latest data disappoints after other high frequency indicators from purchasing managers’ surveys to tax collections signaled activity picking up at a faster clip
  • A recovery in merchandise trade, which accounts for about 31% of India’s gross domestic product, is crucial for any improvement in the economy that entered a technical recession last quarter
  • The fall in inbound shipments was primarily led by petroleum products, with oil imports declining 43.4% to $6.27 billion. Machinery imports fell 13.4% and transport equipment dropped 19.6%
  • “The sustained contraction in categories like machinery and transport equipment suggest weak investment demand,” Sonal Varma and Aurodeep Nandi, economists at Nomura Holdings Inc., wrote in a report to clients

Get More

  • For the full statement, click here

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.