India’s
Trade deficit has contracted to USD 9 Bn, nearly a 17 month low levels, in
Feb-2019. Though, contracting trade deficit should be seen as a rupee positive
development, but one should be wary of the details.
As above table shows, India’s exports grew by just USD 0.3 Bn in Feb and imports has reduced sharply by USD 4.8 Bn. Given the decline in crude oil prices, oil imports have declined by USD 1.8 Bn and Gold imports increased by USD 0.3 Bn. The major decline in imports was contributed by non-oil and non-gold imports, which declined by USD 3.3 Bn. There has been a decline in electronics (USD 1 Bn), transport (USD 0.4 Bn) and chemical related products (USD 0.3 Bn). This sharp decline in non-gold-non-oil imports is also sign of slowing domestic economy. Hence, though, contracting trade deficit is a good news but celebration should rather be delayed!
|
|
Jan-19
|
Feb-19
|
Change
|
|
Exports
|
26.4
|
26.7
|
0.30
|
|
Import
|
41.1
|
36.3
|
(4.80)
|
|
Oil
|
11.2
|
9.4
|
(1.80)
|
|
Gold
|
2.3
|
2.6
|
0.30
|
|
Non-Oil and Non Gold
|
27.6
|
24.3
|
(3.30)
|
|
Trade Deficit
|
-14.7
|
-9.6
|
|
As above table shows, India’s exports grew by just USD 0.3 Bn in Feb and imports has reduced sharply by USD 4.8 Bn. Given the decline in crude oil prices, oil imports have declined by USD 1.8 Bn and Gold imports increased by USD 0.3 Bn. The major decline in imports was contributed by non-oil and non-gold imports, which declined by USD 3.3 Bn. There has been a decline in electronics (USD 1 Bn), transport (USD 0.4 Bn) and chemical related products (USD 0.3 Bn). This sharp decline in non-gold-non-oil imports is also sign of slowing domestic economy. Hence, though, contracting trade deficit is a good news but celebration should rather be delayed!
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