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Trade deficit falls to 17-month low of $9.6bn
* Lower imports reduce trade deficit to 17-month low:
India’s trade deficit fell to 17-month low of $9.6bn in Feb ’19 (I-Sec est: $12.5bn, Consensus: $13.7bn). In Feb ’18, trade deficit stood at $12.3bn while in Jan ’19 it was $14.7bn. The y/y decline in trade deficit of $2.7bn was driven singlehandedly by lower imports. In Feb ’19, imports fell to $36.3bn, a $4.8bn drop from the previous month. This is the largest sequential drop in imports in 37 months. In percentage terms, imports fell 5.4% y/y. exports growth, on the other hand, remained subdued. Exports increased 2.5% y/y to $26.7bn in Feb ‘19
* Lower petroleum imports pull down headline imports:
Imports growth fell on account of lower petroleum imports. Petroleum imports, which accounts for a quarter of India’s total imports, fell 8% y/y to $9.4bn. This is India’s lowest petroleum imports bill since Oct ’17. Imports of other major commodities viz. electronic items, transport goods, gems & jewellery and ores also fell during the month.
* Export growth subdued:
Export growth remained subdued, printing just 2.5% in Feb ’19. In the last four months, export growth has remained weak averaging 1.8% during Nov ’18 – Feb ’19. Electronics and chemicals exports were the only two bright spots recording 46% and 9.6% growth rates respectively. Labour intensive exports (leather + gems & jewellery + textiles) remained flat in y/y terms.
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