India's Trade Deficit Worsens to $23.50 Billion, but Services Surplus Offers Respite

India's Trade deficit widened to $23.50 bn on a sequential 1.50% fall in Exports and a 7.50% rise in Imports. Electronic Goods exports surged by 37.31% to USD 2.81 billion. Engineering Goods exports grew by 3.66% to USD 9.04 billion. Drugs & Pharmaceuticals exports increased by 8.36% to USD 2.31 billion. Meat, dairy & poultry products exports saw a significant rise of 56.18% to USD 0.46 billion. RMG (Ready-Made Garments) of all Textiles exports increased by 11.84% to USD 1.28 billion.

On a Yoy comparison, Merchandize Trade Deficit worsened to $ 85.50 bn from $ 75 bn in the corresponding period last year. The overall Trade Deficit is averaging $ 8bn per month as against $ 6.50 bn in the corresponding period last year. 

USDINR Continues to bear the brunt of the rising deficit, Short CNHINR position washouts, persistent reserve accumulation. We broke above the wedge formation in play since 2022. Favor being flat at the current levels on USDINR and reassess.