India’s merchandise trade deficit narrowed to USD 23.9 bn in Nov-22 from USD 27.6 bn in Oct-22
Download ReportNov-22 Merchandise Trade - Finding stability
India’s merchandise trade deficit narrowed to USD 23.9 bn in Nov-22 from USD 27.6 bn in Oct-22. The is predominantly on account of the sequential increase in exports, while imports suffered a decline. With international commodity prices now showing some signs of stability, the importance of demand side factors will increase compared to price swings. Notwithstanding some recovery in Nov-22, rapid tightening of global financial conditions and heightened geopolitical uncertainty would weigh on India’s exports. Meanwhile, core imports remain relatively healthy, supported by post COVID pickup in economic activity and government’s focus on capex. However, some moderation is likely in case of core imports on account of adverse global spillovers and tightening of domestic monetary policy. We maintain our FY23 current account deficit forecast of USD 130 bn with some downside risk.