India’s merchandise trade deficit narrowed to USD 18.7 bn in Mar-22 from USD 20.9 bn in Feb-22. This was led by an outperformance in exports, vis-à-vis imports even as commodity price effect is likely to have dominated the moves in the month. Exports charted two different peaks – on a monthly basis at USD 40.4 bn was a record high, which in turn allowed the cumulative outturn for FY22 achieve a record level of USD 418 bn.
Amidst uncertainty on the ongoing geopolitical crisis and changing global winds, we expect the trade deficit to post at USD 240 bn in FY23 – a considerable jump vis-à-vis sub USD 100 bn level 2 years ago i.e., in FY20.
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