India’s merchandise trade deficit narrowed to a 5-month low of USD 20.8 bn in Sep-24 from USD 29.7 bn in Aug-24
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Oct 16, 2024
QuantEco Research || Sep-24 Merchandise Trade - What goes up, must come down
India’s merchandise trade deficit narrowed to a 5-month low of USD 20.8 bn in Sep-24 from USD 29.7 bn in Aug-24. This was predominantly on account of a sharp fall in import of precious metals, which appears to indicate a case of mean reversion post the abnormal spike following the reduction in custom duties in the FY25 Union Budget. While the WTO’s upgrade to its near-term global trade outlook offers relief, we believe the prevailing geopolitical uncertainty and the global inclination towards protectionism imparts unquantifiable risks. Meanwhile, for FY25, we maintain our current account deficit forecast of 1.2% of GDP.