India’s Trade Deficit Narrows to a 5-Month Low in September
Chennai: India’s merchandise trade deficit narrowed to a five-month low of $20.8 billion in September as exports registered a growth after two months of slide and import growth eased to 1.6 per cent. The 56 per cent sequential fall in gold import value was a major factor that eased the trade deficit.
Exports grew marginally by 0.5 per cent to $34.58 billion in September, while imports increased by 1.6 per cent to $55.36 billion. This helped the trade deficit to narrow to $20.8 billion.
The trade deficit had widened to a 10-month high of $29.7 billion in August when outbound shipments declined by 9.3 per cent and imports grew 2.8 per cent.
Exports in September were driven by engineering goods which grew 10.55 per cent, chemicals 11 per cent, plastics and linoleum 28 per cent, pharma 7 per cent, ready-made garments 17 per cent and electronics 7 per cent.
“Some of the engineering goods segments like industrial machinery and auto & auto components have done well in the current fiscal so far but the performance of the metal sector has been below par for reasons including pricing issues and logistics costs,” said EEPC chairman Arun Kumar Garodia.
On the other hand, gold imports eased to $4.39 billion in September against $10.06 billion in August. In volume terms, gold imports were down by 72 per cent to 52 tonnes. However, gold imports were a tad higher on a year-on-year basis against $4.11 billion in the same month last year.
For the first six months of the fiscal year 2024-25, merchandise exports were 1 per cent higher to $213.22 billion, and imports grew by 6.16 per cent to $350.66 billion. The trade deficit during the first half of the fiscal year was $137.44 billion.
Overall exports grew 4.86 per cent to $393.22 billion in the first half of the fiscal as services exports were up 10 per cent to $180 billion. Overall imports for the period grew 6.89 per cent to $448.05 billion as services imports were up 9 per cent to $97 billion.
In the month of September, services exports were up 6.6 per cent to $30 billion and imports were up 12 per cent to $16 billion.