India's Merchandise And Services Trade Deficit At 21-Month Low In April

The merchandise trade deficit in April stood at $15.24 billion, according to the export and import data released by the government on Monday

The merchandise and services deficit fell to $1.38 billion compared with $8.37 billion in the same period last year. ( Image Source :Getty )

Merchandise and services trade deficit in India narrowed to a 21-month low in April as imports dropped partly because of some slackening in demand for discretionary items and oil in the Asian economy, Reuters reported. The merchandise and services deficit fell to $1.38 billion compared with $8.37 billion in the same period last year. In March the overall trade deficit was $6.04 billion.

The merchandise trade deficit in April stood at $15.24 billion, according to a Reuters calculation based on export and import data released by the government on Monday. The April trade deficit was lower than the $19.73 billion recorded in the previous month, and below the $19.50 billion forecast in a Reuters poll. April merchandise exports were $34.66 billion, down from $38.38 billion in March, while imports fell to $49.90 billion from $58.11 billion, data showed.

Santosh Sarangi, head of the directorate-general of foreign trade (DGFT), said, "Imports have fallen due to reduced demand for items that are considered discretionary in nature such a gems and jewellery. Globally also, demand scenario is not looking good. Hopefully, things will get better by September."

April oil imports fell 2.46 per cent year-on-year (YoY) to $15.17 billion. "After the Russia-Ukraine conflict commodity prices had gone up, which is cooling off now, and you can see that in our reduced import figures," Sarangi added.

April services exports came to $30.36 billion, while services imports totalled $16.50 billion. The rise in services exports has helped India's current account deficit to shrink more than expected in the October-December quarter, offsetting weakness seen in goods exports.

Sarangi also said the UK and India are making efforts to conclude the free trade agreement talks "at the earliest." The countries missed its initial deadline to conclude talks by October last year.

India’s overall exports (merchandise and services combined) in April 2022 were estimated at $65.02 billion, a growth of 2 per cent over April 2022. Overall imports in April 2023 were estimated at $66.40 billion, down 7.92 per cent over April 2022. India's merchandise exports dipped by 12.7 per cent YoY to $34.66 billion in April this year. Imports, too, declined by about 14 per cent to $49.9 billion as against $58.06 billion recorded in the same month last year, according to the data released by the government.