Since Q2 FY22, the divergence between prelim and final numbers of trade date has been widening.
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India’s monthly merchandise trade data, initially released as a preliminary estimate, gets subsequently revised (in stages) with availability of complete information. The difference between preliminary and final estimates of exports, imports, and trade balance is usually small with no discernible pattern. However, since Q2 FY22, the divergence between prelim and final numbers began widening. Average monthly revision to trade balance in FY23 so far stands at USD +1.6 bn vs. USD 0.7 bn in FY22 and USD -0.3 bn in FY21.
While it is difficult to ascribe a reason for the sudden systematic increase in the magnitude of revisions, we note that it is primarily on account of a step up in upward revision in petroleum exports. With trade balance during Apr-Jan FY23 undergoing a cumulative upward revision of USD 16.5 bn, the current account deficit in FY23 would now be narrower at USD 86 bn vs. our earlier estimate of USD 106 bn.