India Trade November 2018


India: The merchandise trade deficit continues to widen in November

December 14, 2018

Merchandise exports increased 0.8% in November compared to the same month a year earlier, down from the jump observed in October (+17.9% year-on-year) and less than market analysts’ expectations of 5.3%. The moderation in November was largely due to a high base effect, while the expansion itself was underpinned by higher sales of petroleum products and electronic goods abroad.

Merchandise imports increased 4.3% in November, noticeably lower than the 17.6% rise in October and undershooting market analysts’ expectations of 6.1%. The moderated increase in November was due to a slower—but still very high—rise in oil imports and another decrease in gold imports.

The trade deficit in goods widened to USD 16.7 billion in November from USD 15.1 billion in November 2017 (October: USD 17.1 billion deficit). The 12-month trailing sum of the trade deficit grew to USD 185.0 billion in November from USD 183.4 billion in October. Going forward, the deficit is likely to continue rise on robust economic growth and high oil prices, despite government efforts to curb imports and the recent depreciation of the rupee.

Our panelists forecast that exports will expand 12.2% in FY 2018 and imports will rise 15.5%, bringing the merchandise trade deficit to USD 193 billion. In FY 2020, we expect exports and imports will expand 6.1% and 5.1%, respectively, which would result in a merchandise trade deficit of USD 200.0 billion.

Author:, Economist

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India Trade Chart

India Trade12m November 2018

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-sum of exports and imports in %.
Source: Ministry of Commerce and Industry and FocusEconomics calculations.

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