India’s merchandise trade deficit widened sharply to USD 27.1 bn in Oct-24 from USD 20.8 bn in Sep-24
Download ReportQuantEco Research || Oct-24 Merchandise Trade - Inexplicable widening of deficit
India’s merchandise trade deficit widened sharply to USD 27.1 bn in Oct-24 from USD 20.8 bn in Sep-24. This was predominantly on account of record high petroleum products deficit along with a seasonal widening in gems & jewellery deficit. We expect the elevated petroleum trade deficit to normalize in the coming months as international crude oil prices have remained range-bound in recent months with mild downward bias. Although the WTO expects global trade volume to increase by 3.0% in 2025, up from 2.7% in 2024, ongoing geopolitical conflicts and uncertainty on account of Trump’s proposed tariff plans in 2025 could play a dampening role. Meanwhile, with Apr-Oct FY25 merchandise trade deficit clocking USD 165 bn vs. USD 150 bn in the corresponding period in FY24, we continue to maintain our current account deficit forecast of 1.2% of GDP vs. 0.7% in FY23. Risks associated with Trump’s proposed tariff plans will be assessed for potential impact in FY26.