India’s merchandise trade deficit widened to USD 18.7 bn in Feb-24 from USD 16.5 bn in Jan-24.
Download ReportQuantEco Research || Feb-24 Merchandise Trade - Wither concerns?
India’s merchandise trade deficit widened to USD 18.7 bn in Feb-24 from USD 16.5 bn in Jan-24. The sequential increase in deficit is predominantly on account of gems & jewellery even as core trade deficit eased to a 30-month low. Concerns over adverse spillover impact from the ongoing disturbance in the Red Sea region continues to evade India’s official trade statistics. This hitherto suggests either better demand conditions, or the fulfilment of past contractual trade orders (or a combination of both). Considering range-bound commodity price movement along with lack of any adverse impact from the ongoing Red Sea disturbance, we revise lower our FY24 current account deficit forecast to 0.8% of GDP (USD 28 bn) from 1.3% (USD 47 bn) with downside risk, earlier. As such, the forecast for FY25 current account deficit is also undergoing a change to 1.0% of GDP (USD 38 bn) from 1.5% (USD 59 bn) with downside risk earlier.