India’s merchandise trade deficit increased to USD 20.7 bn in Jul-23 from USD 18.8 bn in Jun-23.
Download ReportQuantEco Research || Jul-23 Merchandise Trade - Would deficit stay range-bound?
India’s merchandise trade deficit increased to USD 20.7 bn in Jul-23 from USD 18.8 bn in Jun-23. While both exports and imports showed a sequential decline, the widening of the trade deficit was on account of a sharper contraction in exports vis-à-vis imports. While deficit on account of gems & jewellery and petroleum products eased sequentially, the core trade deficit widened on account of miscellaneous products, electronics and machinery items. This could be reflective of seasonal (pre festive season buildup of electronics inventory) as well as structural factors (domestic manufacturing sector’s capacity utilization has surpassed pre COVID levels). On a net basis, while we maintain our FY24 current account deficit forecast of USD 53 bn vs. USD 67 bn in FY23, it appears that the anticipated correction is getting front loaded, especially in the backdrop of firming up of international commodity prices.