India’s merchandise trade deficit widened to a record high of USD 23.3 bn in May-22 from USD 20.1 bn in Apr-22
Download ReportMay-22 Merchandise Trade -Monthly deficit attains a new peak
India’s merchandise trade deficit widened to a record high of USD 23.3 bn in May-22 from USD 20.1 bn in Apr-22. The widening is on account of sequential moderation in exports even as imports held their ground. Noteworthy is the increase in both black (coal) and yellow gold imports due to different reasons. Going forward, we expect the pressure on trade deficit to persist from anticipated slowdown in global demand, elevated commodity prices, progress on vaccination, and some near-term impact on account of recently imposed export restrictions by the government in case of few commodities. While some relief can be expected as India seeks to diversify its oil imports with additional inbound shipments from Russia, we nevertheless revise our forecast for FY23 current account deficit to USD 105 bn from USD 85 bn earlier.