India’s merchandise trade deficit narrowed to an 11-month low of USD 15.6 bn in Mar-24 vis-a-vis USD 18.7 bn in Feb-24.
Download ReportQuantEco Research || Mar-24 Merchandise Trade - Deficit moderates, risk ahead
India’s merchandise trade deficit narrowed to an 11-month low of USD 15.6 bn in Mar-24 vis-a-vis USD 18.7 bn in Feb-24. The sequential moderation in deficit is predominantly on account of gems & jewellery, where record high prices are likely to have weighed on the import volume. Meanwhile, petroleum trade deficit scaled a record monthly peak, which could potentially worsen after considering the increase in prices during Apr-24. As such, while we estimate FY24 current account gap at 0.8% of GDP (with likelihood of a minor downside risk), our forecast of 1.0% of GDP for FY25 faces an upside risk from global commodity prices, which have hardened in recent weeks. Ongoing and escalating geopolitical conflict in the Middle East is a live risk and needs real time monitoring for trade implications