India’s merchandise trade deficit moderated to USD 26.7 bn in Sep-22 from USD 28.0 bn in Aug-22
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Oct 04, 2022
Sep-22 Merchandise Trade - A predictable moderation
India’s merchandise trade deficit moderated to USD 26.7 bn in Sep-22 from USD 28.0 bn in Aug-22. The sequential moderation in trade deficit in Aug-22 is predominantly on account of easing of petroleum deficit even as core trade deficit scaled a new high. Rapid tightening of global financial conditions and heightened geopolitical uncertainty is weighing on India’s exports. Meanwhile, core imports continue to remain relatively healthy, supported by post COVID pickup in economic activity, pent-up demand, and government’s focus on capex spending. We maintain our FY23 current account deficit forecast of USD 130 bn, albeit with a mild downside risk.