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India: Trade deficit narrows in July

August 14, 2015

Recently released data related to India’s external sector showed that the trade deficit totaled USD 12.8 billion in July, which was an improvement over the USD 14.3 billion shortfall observed in the same month last year and marked the smallest deficit tallied in eight months. For the 12 months up to July, the trade deficit recorded USD 136.6 billion, which was an improvement from the 138.1 billion shortfall tallied in the 12 months up to June and marked a nine-month high.

The narrowing in the trade deficit showed that imports contracted 10.3% annually in July, which notably contrasted the 4.5% expansion registered in July of last year. The contraction was largely the result of the low oil-price environment. Accordingly, oil imports totaled USD 9.5 billion, which represented a 34.9% decrease compared to the same month of the previous year.

Meanwhile, exports contracted 10.3% year-on-year in July, which was a steeper contraction compared to the 0.2% decline tallied in July 2014 but marked the most moderate fall since December 2014.

FocusEconomics Consensus Forecast panelists expect exports to contract 0.2% in FY 2015/2016, reaching USD 310 billion. In FY 2016/2017, the panel sees exports expanding 7.8% to USD 334 billion.


Author: Angela Bouzanis, Senior Economist

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India Trade Chart


India Trade12m July 2015

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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