Making Sense

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 ...

India's Trade deficit narrowed sharply to $ 15.60 bn while the services surplus narrowed to $ 12.70 bn from $ 16.70 in the previous month. POL Deficit as a % of Trade deficit was sharply higher at 76% as POL exports were sharply down to $ 5.40 bn from an average of $ 7.10 bn over the previous 11 months. The sharp deficit in gems and jewelry imports recorded in February eased to $ 2.20 bn in the month of March.  For the year as a whole, Merchandize trade recorded a deficit of $ 238 bn and Services Trade recorded a surplus of $ 167 bn , thus on trade combined India recorded a deficit of $ 78 bn from previous year's $ 122 bn.  On the transfers and income, India has so far recorded a surplus of $ 41 bn and in the last quarter assuming a number of $ 14 bn, the transfers and income surplus will likely aggregate $ 55 bn , thus leaving a Current Account Deficit for the year as a whole to $ 23 bn.  In my February Post on release of the Trade data , I had estimated Current Account ...

India recorded a trade merchandize deficit of $ 18.70 bn and a services surplus of $ 16.76 bn, thus registering a combined deficit of $ 1.95 bn. Extrapolating averages, I see Current Account Deficit at $ 24 bn for FY23-24 and an even lower number if I adjust the actuals with the trend for the months of Jan and Feb, at ~ $ 20 bn which I think is a more probable outcome.

India CPI is likely to come in at 4.90% with Reuters Poll showing consensus estimates at 5.02%. My Estimates for Trade Deficit are at $ 16 bn much below street estimates of a reading of $18.30 bn.   It's not the absolute number which is important but you have to understand where will the delta come from. It is important to understand that if Merchandize trade + services number comes in line with previous numbers, averaging $ 6.60 bn combined deficit we will end the year with a current account deficit of $ 29 bn. However, if the trade data (gds& services) exhibits last month's trend of $ 1.3 bn deficit for the next 2 months, then the Current account deficit will be well under $ 20 bn. 

India's overall Trade Deficit was a positive surprise with data summarized below: Sharply higher services exports at $ 32.80 bn (18% higher mom) and lower merchandize imports (down 7% lower mom) saw trade deficit narrow to $ 740 mn.  If we can maintain the higher services exports and lower merchandize imports, we could end the year with an even lower current account deficit.  For the week ended 09 Feb 2024, FX reserves declined by $ 5.20 bn to $ 617 bn. 

India recorded a trade deficit of $ 19.80 bn. My own estimates suggested a print of $ 20 bn.  Snapshot (in mn $) Exports Imports Trade Deficit Extrapolating Averages Merchandize Trade       35,250       55,933       -20,683       -2,48,194 Services       27,568       14,240        13,328        1,59,939 Est Transfers & Incomes                 50,000 Current Account Deficit               -38,255 On the Merchandize Trade, m...

 India recorded a merchandize trade deficit of $ 20.58 bn below consensus est of a reading of $ 23.60 bn and sharply lower than previous month reading of $ 31.46 bn. During this period, exports remained steady at $ 33.90 bn (+ ~1% mom) and Imports sharply decelerated to $ 54.48 bn from previous $ 65 bn (- 16% mom). FYTD this corresponds to $170 bn of merchandize trade deficit. Corresponding period previous year recorded a trade deficit of $ 189 bn. For this FY, Per month average Merchandize Trade Deficit is at ~ $ 21 bn.