India: Exports accelerate and trade deficit improves
November 11, 2013
In October, the trade balance incurred a USD 10.6 billion deficit. The reading represents an improvement compared to the USD 20.2 billion shortfall registered in the same month last year.
A 13.5% increase in exports over the same month last year (September: +11.2% year-on-year), which represents the fourth consecutive month of double-digit growth in exports, contributed to the lower deficit in October. Exports continue to benefit from a weak Indian rupee. Meanwhile, imports contracted 14.5% in October, which followed the 18.1% decrease tallied in September. Oil imports decreased on the back of a moderation in global crude prices. In addition, gold imports fell sharply in October due to fresh restrictions.
The government has set an export target of USD 325 billion for this fiscal year. In order to achieve this goal, the government announced a package worth an estimated INR 30 billion (USD 550 million), which is intended to stimulate the country's exports.
FocusEconomics Consensus Forecast panelists expect exports to increase 11.2% in FY 2013/2014, reaching USD 329 billion. In FY 2014/2015, the panel sees exports expanding 6.8% and reach USD 348 billion.
Author: Ricardo Aceves, Senior Economist