India’s merchandise trade deficit narrowed to USD 19.8 bn in Dec-23 from USD 20.6 bn in Nov-23.Download Report
QuantEco Research || Dec-23 Merchandise Trade - Rear view comfort, but bumps ahead
India’s merchandise trade deficit narrowed to USD 19.8 bn in Dec-23 from USD 20.6 bn in Nov-23. After the abnormal spike in merchandise trade deficit in Oct-23, the normalization process continues. This has benefited from the ongoing moderation in international commodity prices despite elevated geopolitical risks in the last 3-4 months. However, recent geopolitical disruption close to the Red Sea trade route is a developing situation and could potentially weigh upon India’s trade performance in the coming months if the current situation persists as this would lead to an increase in shipping costs. We maintain our FY24 current account deficit forecast of 1.3% of GDP (USD 47 bn). Besides geopolitical risks on merchandise trade, we will closely monitor early signs of moderation in the services trade surplus.