India: Trade deficit widens as imports skyrocket in May
July 1, 2011
In May, the trade balance incurred a deficit of USD 15.0 billion, according to provisional data released on 1 July. The print marked a significant deterioration over the USD 10.0 billion deficit recorded in the same month last year and was not far from the historical deficit of USD 15.8 billion incurred in August 2008. The widening of the trade deficit was mainly driven by skyrocketing imports, which increased 54.1% over the same month last year to reach a record USD 40.9 billion. The print was driven by a surge in non-oil imports, which expanded a stellar 71.0% year-on-year, while oil imports increased 18.6%. Exports also expanded robustly, increasing 56.9% over the same month last year to reach USD 25.9 billion. As a result, the moving 3-month sum rose to 44.8% over the same period last year, which was slightly above the 42.5% expansion observed in April and well above the 3-month sum of imports, which rose 28.0% (April: +17.7% yoy). The government set a target of USD 500 billion for the fiscal year 2013/14, which is approximately twice the current level of exports.