India Balance of Trade

India's trade deficit widens to 5-month high of USD 15.33 billion as exports growth lose momentum in April.

Published by Ministry of Commerce and Industry, RBI. Updated until April 2019. (Published on May 16th, 2019)  

Note: The seasonally adjusted series has been obtained using the Eviews census X-13 procedure X-11 method of seasonal adjustment.

Recent Data Trend

India's trade deficit widened to a five-month high of USD 15.3 billion in April 2019 from USD 10.89 billion in the previous month. The significant expansion in the trade balance was due to a four-month low growth in exports and five-month high growth in imports in April. The merchandise exports lost its growth momentum after increasing to its best monthly performance of 11.6% YoY in March by declining to 1.67% in April. The merchandise imports, on the other hand, grew by 4.48% YoY in April as against 1.49% YoY in the pervious month.

The growth in 17 out of 30 major export commodities is in negative territory in April including the major labor-intensive commodities gems & Jewellery (-13.38%), leather & leather products (-15.25%) and engineering goods (-7.07%). Domestic constraints such as lack of bank credit and delay in refund of input tax credit to exporters continue to hinder export growth. On the global front, the rising trade tensions between US and China,  slowing global economy and the withdrawal of trade concession on USD 6.3 billion worth of India goods under Generalized system of preferences (GSP) benefits by the US will put more pressure on the Indian exports in the coming months.

Merchandise imports grew on the back of oil and gold imports. Oil imports surged to a four-month high of 9.3% YoY and gold imports to 62.89% YoY in April. The recent increase in prices of crude oil in the global market contributed to the rise in India's oil import bill. Higher demand of gold ahead of the second-biggest gold-buying day in the Hindu calendar coupled with falling prices of gold in the global market since February 2019 contributed to a rise in gold imports in April. On the contrary, India's core imports (non-oil and non-gold) recorded a negative growth of 2.19% YoY for the sixth month. Poor imports of non-ferrous metals, machinery, and transport equipment are indicative of a slowdown in manufacturing activities led by weakness in consumption demand.

We feel, the worsening of trade balance due to sluggishness in export growth is not a good sign and the new government must take steps to revive the export sector. Although this may be difficult, given the slowing global economy and escalation in trade disputes between the US and China.

Brief Overview

The balance of trade data records the value of merchandise trade of India with its trading partners. The data on import and export of the Indian economy is published by the Ministry of Commerce on a monthly basis. Merchandise trade is a key indicator of the development of the economy. India’s largest trade partners include US, EU, and China. India has maintained an overall trade deficit since 1990 and in the past decade, the deficit has increased manifold. According to the World Trade Organization, India’s share export of merchandise goods in 2015 was 1.5%.

For more information visit the official government website

Next Release Date: June 14, 2019

Trade Balance- Quarterly

Trade Balance- Annual

Note: Here years represent fiscal years. For example, 2016 refers to the period Apr'2016-Mar'2017 and so on.

Export by Commodities

Note: The YoY% has been calculated on absolute USD values.

Import by Commodities

Note: The YoY% has been calculated on absolute USD values.

World Commodity Prices

Note: The above data has been sourced from the World Bank Pink Sheet which provides monthly data on the prices of commodities. To know more about this, visit the official website.