India’s merchandise trade deficit widened to USD 19.7 bn in Mar-23 i.e., a 3-month high
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India’s merchandise trade deficit widened to USD 19.7 bn in Mar-23 i.e., a 3-month high. For the month of Mar-23, while both exports and imports recorded sequential year-end recovery, the widening in trade deficit was led by a relatively faster pick-up in imports vis-à-vis exports. Q4 FY23 has proved to be an inflexion point in India’s trade dynamics. While robust services and remittances, lower commodity prices, and moderation in domestic demand were the headline factors behind compression in current account deficit; increasing reliance on Russian imports and upward revision in trade data, esp., exports have played a supportive role in the background. For FY24, we forecast current account deficit at 1.4% of GDP (USD 53 bn), a sizeable narrowing compared to FY23 forecast of 2.0% of GDP (USD 68 bn)