India Trade Balance


India: Trade deficit widens on slowing exports

January 10, 2014

In December, the trade balance recorded a USD 10.1 billion deficit. The reading represents an improvement compared to the USD 17.7 billion shortfall registered in the same month of the previous year, but it came in below the USD 9.2 deficit observed in November.

Exports expanded 3.5% in December over the same month of the previous year, which marks a sharp deceleration compared to the 5.9% increase observed in November. December's figure represents the sixth consecutive month of positive growth, although it is the weakest since June 2013. The slowdown reflected a deterioration in overseas sales of petroleum products, mainly due to a maintenance shutdown by energy giant Reliance, India's largest petroleum products exporter.

Imports decreased 15.3% annually in December (November: -16.4% year-on-year). The fall in imports continues to reflect the government's aggressive measures aimed at curbing imports of gold. The government has hiked the tax on gold imports, while the Reserve Bank of India has imposed lending restrictions on those importers seeking to purchase gold.

FocusEconomics Consensus Forecast panelists expect exports to increase 7.4% in FY 2013/2014, reaching USD 322 billion. In FY 2014/2015, the panel sees exports expanding 9.3% and reach USD 352 billion.

Author:, Senior Economist

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