India’s trade deficit narrows to 17-month low in February 2019

India’s trade deficit narrowed to a 17-month low of $9.6 billion in February 2019 as merchandise imports fell on the back of lower crude oil prices. The trade deficit had stood at $9 billion in September 2017.

India’s exports rose 2.44 per cent to $26.67 billion in February from a year earlier, while imports were down 5.41 per cent to $36.26 billion, according to data released by the commerce ministry.

In rupee terms, however, exports and imports expanded at 13.34 per cent and 4.66 per cent respectively, mostly because of depreciation in the rupee. So far this year, the rupee has weakened 2.07 per cent, the worst performer among Asian currencies.

Cumulatively, during the first 11 months of the fiscal year 2019 (April-February), exports and imports grew at 8.85 per cent and 9.75 per cent, respectively, while the trade deficit expanded to $165.5 billion from $148.6 billion during the same period a year ago.

In February 2019, exports of Indian pharmaceuticals (16.1 per cent), chemicals (4.1 per cent), engineering goods (1.7 per cent), and ready-made garments (7.2 per cent) rose, while shipments of gems and jewellery (-2.1 per cent) and petroleum products (-7.7 per cent) contracted.

Growth in non-oil, non-gems and jewellery imports, an indicator of the state of economic activity in the country, contracted 3.7 per cent in February, led by transport equipment (-19.6 per cent), electronic goods (-6.5 per cent) and plastic (-1.9 per cent).

Import of crude oil slipped by 8 per cent as global Brent price decreased by 1.97 per cent in February. Gold imports in February fell 10.81 per cent year-on-year to $2.58 billion, compared to $2.90 billion a year ago.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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