India’s merchandise trade deficit widened to a fresh record high of USD 25.6 bn in Jun-22 vs. USD 24.3 bn in May-22
Download ReportJun-22 Merchandise Trade - Another month, another peak
India’s merchandise trade deficit widened to a fresh record high of USD 25.6 bn in Jun-22 vs. USD 24.3 bn in May-22. For third consecutive month, the widening has been on account of sequential expansion in imports even as exports contracted. Core trade deficit (headline excl. petroleum and gems & jewellery) rose sharply attaining double-digit figure of USD 10 bn for the first time. Going forward, we expect pressure on trade deficit to persist from anticipated slowdown in global demand, elevated commodity prices (despite recent moderation), progress on vaccination, and some near-term impact on account of recently imposed quantity and price restrictions by the government in case of export-import of few commodities. While some relief would be likely with India gradually diversifying oil imports from Russia, we nevertheless expect a significant widening of the current account deficit to USD 105 bn in FY23 from USD 39 bn in FY22.