India: Trade balance registers largest deficit on record
December 1, 2011
In October, the trade balance deteriorated to a USD 19.6 billion deficit. The reading was nearly double the USD 9.8 billion deficit recorded in the previous month and, in fact, represents the largest trade deficit on record. The outturn reflected stronger imports and faltering exports. Imports amounted to USD 39.5 billion, which represents a 21.7% expansion over the same month last year and thus exceeded the 17.1% increase tallied in September. Nevertheless, the trend continues pointing downwards, with annual average growth of imports edging down from 24.4% in September to 24.1% in October. Meanwhile, exports dropped from USD 24.8 billion in September to USD 19.9 billion in October. The print marked a significant slowdown, from the 36.2% year-on-year expansion observed in September to a relatively moderate 10.8% increase. As a result, the annual average growth of exports dropped from 41.9% in September to 40.7% in October. The government has set an export target of USD 500 billion for the fiscal year 2013/14, which is approximately twice the USD 290 billion reached in the last 12 months.